Biotech Values

[DewDiligence]

>I thought you said the Vertex deal wasn't so good in the morning. What made you change your mind?<

There was no change of mind. Here’s what I said this morning in #30815:

“Since VX-950 is by far the better drug, I would have expected VTRX to command a much better deal on VX-950 than IDIX got from NVS on NM283. Yet the economic terms are roughly comparable. VRTX retains all North American rights, but has to pay 50% of development costs and gets only a royalty in Europe; IDIX, on the other hand, gets 100% of development costs reimbursed by NVS and has a 50/50 profit split in both the U.S. and western Europe. The combined up-front and milestone payments in the two deals are almost exactly the same.”

Isn’t this clear? The VX-950 deal was highly lucrative in an absolute sense but it was IMO not as lucrative a deal as VRTX should have been able to command for a drug as promising as VX-950.

Regarding your assertion that NVS screwed up in the HCV arena by not snaring VX-950, I re-iterate that NVS probably did make a concerted effort to get VX-950, but VRTX may have preferred JNJ for the reasons mentioned in my previous post.

It’s easy to be critical of a company like NVS when you don’t know all the details or don’t consider all of the angles. When it comes to partnering and licensing transactions, no Big Pharma has a perfect batting average, but NVS’ is as good as anyone’s.