Idenix Pharmaceuticals (IDIX)

[DewDiligence]

Re: 2007 cash burn

>Why does IDIX plan on burning through 1/3 of their cash by the end of this year?<

Cash and marketable securities at 6/30/07 were $160M and the company’s guidance for the amount at year-end is $100-110M, so indeed they expect to burn about 1/3 of the balance during the second half of the year.

Why so much?

1. IDIX recognizes half of the profit/loss attributable to Tyzeka in the US and the five main countries of western Europe. Currently, the revenue is less than the selling and production costs and hence Tyzeka is generating a loss. (This is not an unusual predicament for a recently-launched drug; many drugs take 2-3 years to become profitable.)

2. IDIX pays half the cost of Tyzeka post-marketing studies, of which there are several (#msg-22555236).

3. IDIX pays 100% of the R&D for its early-stage HIV and HCV drug candidates.