China deal and royalties. AdVaccine CEO said they will go to Phase 3 this quarter. It gives profit (royalties) not revenue, use trial / efficacy data to show to others.
I am thinking the royalty is between 7 - 9% (Dr Kim said high single digits).
We don’t know price per dose (because AdVaccine mostly will not fall under DoD restrictions). Sinovac is $29.75 per dose in China. So assuming $30 per dose.
We don’t know how many doses they will make in China. (I think they will make at least 100 million doses this year. So around 3 billion in revenue for AdVaccine)
3 Even royalties number is a guess (7 - 9%). Assuming 7.5 and the
4 Payments that AdVaccine to make in addition to royalties upon reaching milestones is also not clear for us (CEO didn’t disclose what are the milestones and how much money per milestones)
So royalties may be 3b * .075 = 225m. In addition if they meet all milestones we may get additional $100million. So we are talking $325 million from China minimum. I excluded Cellectra assuming that will cover taxes. So we are talking 1.625 EPS from China. Bio has 35 * EPS. That gives share price of $56.875 from China deal alone. I think this is conservative and China needs 3 billion doses and not many vaccine players there. Every additional 100 million doses in China are 1.125 EPS. That is 35 * 1.125. So every 100 million gives 39.75 PPS.
Now if anyone wants to use 20 as multiplier of EPS then $33 from China as base and additional $25 per every 100 million doses.
Now coming to the rest of the world also each of the three big manufacturers (not including RH) can make at least 100 million per year but our CEO says 100 million in 2021 even after adding new manufacturers...
Pricing rest of the world is around $20 ($19 per DoD document and they cannot sell below it. Cellectra cost per dose is less than $ 1 - 3 .
Cellectra manufacturing scaling absolute black box.
With all these uncertainties it is extremely difficult to value the company... but shorts will run for the hills.
By Mark
It took me a while to see the real benefit of working with Advaccine. The license structure looks fine but nothing to scream from the rooftops about. It is pretty standard and a low capital revenue stream (once sales kick in and milestone payments are hit). The real benefit is the transferability of the clinical data to other countries for EUA or the equivalent elsewhere. I am starting to think that both the Chinese and South Korea studies will benefit Inovio indirectly and directly, respectively through the ability to garner approval in other jurisdictions / countries. I'm certain there is a long game being played that we are not all privy to, and it would be good to be able to convert conjecture into understanding but communication has never been a hallmark of this company.
By HDL Doc
8.2 Development Milestone Payments. Advaccine shall pay to Inovio the one-time, non-refundable, non-creditable payments set forth in the table below. Advaccine shall notify Inovio in writing within ten (10) days of achievement by a Product of a regulatory milestone event (except for milestone No. 3, which Inovio shall notify Advaccine upon achievement) and Advaccine shall pay to Inovio the required milestone payment within thirty (30) Business Days of the achievement by a Product of the applicable milestone event.
No. Milestone Event Milestone Payment
1 Enrollment of first subject in first Phase 2 Clinical Trial or Pivotal Clinical Trial for the Product in the Advaccine Territory [***]
2 Enrollment of first subject in first Phase 3 Clinical Trial or Pivotal Clinical Trial for the Product in the Advaccine Territory [***]
3 Marketing Authorization for a Product in the Field in the U.S. by the FDA [***]
4 Marketing Authorization for a Product in the Field by the NMPA [***]
5 First Commercial Sale of a Product in the Advaccine Territory [***]
Commercial Milestone Event: 4 rev tiers below.
The aggregate Net Sales of the Products in the Advaccine Territory in a given Calendar Year first reaches [***]
