Biotech Values

[DewDiligence]

…but IMGN will be entitled to mid single-digit royalties on T-DM1, which still could be material if the drug turns out to be the blockbuster that some are predicting.

Is IMGN’s mid-single-digit royalty rate net or gross?

One pitfall of biotech investing is assuming that a royalty % quoted by management of the royalty recipient is net. More often than not, the figure disclosed to investors is actually gross.

For some companies this distinction is not material, but for companies that have high pass-though obligations to third-party licensors, the distinction makes all the difference in the world.