Replies to post #198557 on Biotech Values

[mcbio]

LGND One can only speculate - but what brings me to low single digit royalties is that LGND itself said during investor day 2014 that it would be a 100 Mio opportunity in royalties. If it is successful i would think it is fair to say that it has a peak potential of 5 billion or even 10 billion (that is what analyts say and i guess LGND did not downplay things here)- what brings me to 1-2%. Anyway 100 mio + in royalties would not be that bad for LGND..

Good catch. It does at least say >$100M so that further leaves things open to interpretation. And one would assume a company would want to be a little conservative in what they commit to print though that is obviously not always the case in small-cap biotech (haven't followed LGND closely enough to know their track record here).

[biomaven0]

Yes >$100m in peak royalties might well correspond to 2% on a $5 billion product, or maybe even 1% a $10 billion drug.

This was a PCOP project - their royalty rates were typically low single digit even on their own compounds (which this was not). So something like 1.5% is quite plausible.

Of course $100m royalties is close to $5 a share in additional EPS - LGND only has a little over 20 million shares out.

Peter