Biotech Values

[DewDiligence]

This is not mere word parsing. [IDIX’s] press release wording makes it sound as if NVS had an option and decided they did not want to exercise it, whereas a mere right of first negotiation could fall apart for a variety of reasons, including that IDIX had a different and more optimistic view of the drug than did NVS.

NVS has a right of first negotiation on each compound in IDIX’s pipeline when a compound reaches the proof-of-concept stage. Loosely speaking, this is an “option” and is often described as such; however, the right of first negotiation is not a true option in the technical sense of the word insofar as the licensing terms are not fully pre-specified and must be negotiated.

In the case of IDX184, we have no way of knowing how far the negotiations progressed before NVS decided not to “exercise” the “option.” We do know, however, that NVS had some interest in licensing IDX184 else NVS would have opted out before entering negotiations as they did in the case of IDX899 (where IDIX ended up partnering with GSK).