Biotech Values

[DewDiligence]

Nice call. I didn’t think FRX (or anyone else) would pay big money for a drug in a crowded category with many generic options. However, as one can see from the schedule of contingent-value rights in this transaction, FRX evidently thinks Viibryd will be hard-pressed to exceed $800M in sales in the next five years, and I would be willing to bet that it won’t.

FRX has been trying for a long time to find something to compensate for the lost revenue when Lexapro goes off-patent next year. They still haven’t found it, IMO, but this deal does allow FRX to leverage the existing Lexapro salesforce, and hence the deal is less risky for FRX than a comparably priced deal would have been for some other compound. Regards, Dew