Intellipharmaceutics International Inc. (IPCI)

[AngeloFoca]

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=128642843

Love your projections but 20% royalty on a generic drug ..... I don't think is reasonable to use.

Bottomline generic royalties are much lower. You said yourself you came up with 10% royalty on focalin during the exclusivity period and lower thereafter. So I'm not certain how you are starting at 20%. The high end royalties are only in play when there is licensing of groundbreaking IP involved. In the generic space of the ANDA candidates, there is no groundbreaking differentiator for IPCI IMO.

Amigo Mike

The reason Focalin royalties are so low is because PAR financed the development and brought it through FDA approval, you can compare it to a pharma partnering pre-clinically where typically 5% is what you might expect to get - therefore it should not be in any way used as guidance for what IPCI will get, royalty wise, on all the other XR generics it developed and got FDA approved on it's own... you seem to be confusing Xtended Release XR Generics with plain vanilla generics.

20% royalties is the least one should expect not the most... and 40% to 50% would not be uncommon for a product that is already FDA approved... I used 20% to get the skeptics on board... but I guess you're beyond reach.

I was going to say we are of differing opinions... and then I came across Doog's post where Mackie seems far more in agreement with my estimation than yours.

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=128671703

According to Symphony Health Solution, sales in the U.S. for 12 month ended August 2015 for brand Seroquel XR were approx.
US$1.2BN. We are assuming market size would decrease by 35% to US$780M per year after its genericization. We estimate IPCI’s
generic Seroquel XR would take max. 9% of the market and after that the market share would drop by 20% on yearly basis. We are
assuming a gross margin of 80% and that IPCI and Mallinckrodt would evenly split the gross profit. Our estimates of IPCI’s share
from its generic Seroquel XR sales in the U.S. from 2017 to 2020 are US$13.5M, US$21.2M, US$17.0M, and US$13.6M, respectively.
My Note: Evenly splitting the gross profit where the gross margin is 80% is equal to 40% Pure Profit Royalties.

Apparantly Mackie would argue my estimates are far too low... and I would agree... but it was an example of what we can least expect.