Biotech Values

[DewDiligence]

Re: RVNC's acquisition of BTRX patents

…Allergan…must…have been well aware of these patents for some time and had no inclination to purchase them…

The first part of your statement is correct, but the second part of your statement is more nuanced.

AGN was, in fact, engaged in negotiation to license the BTRX patents as part of a larger transaction, but they didn’t consummate a deal. I don’t know whether the failure to consummate a deal was due to a disagreement on value or some other reason.

…a major oversight by Allergan considering Revance paid only $2 million upfront.

That’s the wrong way to look at it, IMO. The cumulative cost of RVNC’s deal with BTRX will be $18M (the amount payable to BTRX if various milestones are met) plus whatever RVNC spends developing any indications it wouldn't otherwise have developed. The cost of developing such additional indications will clearly swamp the $18M in direct payments to BTRX, and it is this higher (unquantified) amount that may have persuaded AGN to forego a deal with BTRX.

True, AGN could have acquired the BTRX patents strictly for defense (i.e. with no intention of developing additional indications covered by the patents), but they may have been too arrogant to deign to employ such a maneuver.