Ariad Pharmaceuticals Inc fka ARIA

[sed_noli_modo]

Back-of-the-envelope, making a few WAGs about growth rates and avoided costs, ignoring tax issues:

$140 m. upfront receipt

Rev's foregone:
2015 European Sales: $27 m.
Assume 20% growth rate

Costs avoided:
125 employees @ (assumed) $125K = $15.6 m.
Assume 10% growth rate
Rent: $1 m. annual (assumed)
Assume 5% growth rate

Other assumptions:
1900% gross margin (COGS=.05*Rev's)
35% royalties
10% discount rate

10-year NPV to Ariad: $58 m., ignoring the repurchase option