Biotech Values

[jbog]

First of all this post has some statement from Wheeler that I'm not familiar with: …Wheeler also made a statement to the effect that the program costs would end up being shared proportionally in the same ballpark as the revenue split.

Secondly, in your cash flow estimate you calculated Momenta's payback effective to 100% of Sandoz's stated development costs:

Thus, the $50-70M range cited by NVS in the latest Court pleadings is indeed the amount for which MNTA will eventually have to reimburse NVS from MNTA’s Lovenox cash flow.

Based on:

1. $60M (the midpoint of the above range) of reimbursement liability;

2. the fact that MNTA’s reimbursement is capped at 50% of MNTA’s net cash flow from Lovenox; and

3. MNTA’s assertion that it can meet the full reimbursement liability in three quarters or less of post-launch time…

…it follows that MNTA’s net cash flow from Lovenox during the first three quarters post-launch will be a minimum of $60M/0.50 = $120M, which is an annualized rate of $160M.

Note that the $160M figure above represents MNTA’s cash flow from Lovenox net of all expenses except taxes*, and it is a rock-bottom, minimum amount. In all likelihood, MNTA’s net cash flow from Lovenox during the first year will be larger than $160M.