Biotech Values

[DewDiligence]

IDIX – Musings on the size of an HIV partnership:

According to comments on yesterday’s Morgan Stanley webcast, IDIX expects the partnership deal for its HIV drug, IDX899, to be the biggest HIV-related transaction since GILD’s acquisition of Triangle in 2002, which was a roughly $500M deal.

This is consistent with my prior musings on the partnership potential of IDX899 (#msg-25885594), although I think a $500M deal represents the high end of what is likely rather than the midpoint of the likely range. Here is my reasoning:

Sustiva currently sells more than $1B per year and sales are growing, thanks to its use as a component of the 3-drug combo pill, Atripla, which has become the de facto standard in first-line treatment.

If IDX899 beats Sustiva on efficacy and resistance profile with no deficit in tolerability, a partnership ought to be worth $500M, IMO.

If IDX899 is merely non-inferior to Sustiva in efficacy and tolerability, it may still have a place in the HIV SoC based on its higher barrier to resistance; in this case, an IDX899 partnership ought to be worth about $150M, IMO.

Of course, there are shades of gray between the two cases above depending on the clinical data. Moreover, IDX899 could fail altogether in the phase-2 trial just getting underway, although this is not likely, IMO.

JMHO, FWIW