Insmed Inc (INSM)

[rstor1]

I would ask for a 30% royalty to settle all litigation. Less than that and I’d take my chances in court.

Dew,

Couple of thoughts on this -

We have to see how Iplex does in the marketplace, but if it gains the lion's share of the IGFD population, as I believe it will, Tercica will not be able to survive as an independent entity even with the 30% of Iplex profits that you propose. They don't have the cash and the revenues will not support them until/if they manage to expand into the larger indication. They are lucky that they have the Kingsbride deal in place, else I doubt that they could get financing at this point.

Given the above, I have to believe that they need to shut Insmed down, and would not look to settle, unless it was in the form of a merger.

If it does go to court, I would be shocked to see an award of the 30% magnitude. The court would, I believe, be guided by prevailing royalty arrangements. For underying IP licenses, as opposed to licensing molecules on which development work has been done, the rates that I have seen are in the low-mid single digits. Look at CAT and PDLI. Look at the NKTR settlement announced today (no % given, but a 25 mil fee.) There would also be a punitive award, obviously.

Regards,
Bob