Replies to post #30457 on Intellipharmaceutics International Inc. (IPCI)

[wimuskyfisherman]

Doog- Remember that they had exclusivity on those two Focalin doses last Q. That meant they were getting top dollar for those doses. Which in turn meant more profits. Now this Q, exclusivity expires and competition sets in on those doses. Then the price erodes hugely as others want a piece of the pie and everyone is undercutting each other. I am guessing that is how it partly played out.

[swe77]

There can be many different ways to explain that discrepancy. The Bloomberg numbers can't be wrong. I mean it's not an accounting system. It's possible that a person who generated that report didn't use the correct filters.

The other way to interpret those numbers is to assume that the profit sharing % was decreased as the exclusivity windows had expired.

If the above assumption is correct then IPCI's profit sharing percentage decreased from 9.8% during the exclusivity window to 5.27% in July ((June $5,750,000 * 9.8% = $563500) + (July $5,190,000 * 5.27% = $273513) + (August $6,690,000 * 5.27% = $352563) = $1,189,576).

We should request a breakdown (MNK, Par) of licensing revenue from the company to be able to reverse engineer the terms of the MNK deal. It may take multiple quarters to get it right.

[AngeloFoca]

the Bloomberg numbers were wrong...or IPCI just had their PAR/FocalinXR profit sharing licensing deal terms changed to a drastically reduced level after their fiscal Q2 earnings

I don't have time now, nor the next couple days to go deeper into this... but the symphony #s are not wrong... so don't go barking up that wrong tree... there are enough variables to figure out without adding another which is indeed FACTS carved in stone and the only thing we know for sure.

We know IPCI got $2 million from PAR on $20 million in Focalin sales for Quarter 2 - PAR's Focalin sales only dropped to $17 million for quarter 3 - so if indeed IPCI was getting 10% royalties for Quarter 2... then it should have gotten $1.7 million for Quarter 3, but it didn't... therefore IPCI's %age has been drastically reduced.

Somewhere about a year ago or so I did some figuring on the Focalin royalties... and what I came up with seemed to imply that my assertion that IPCI gets a greater % in royalties from Focalin while it's under the 180 day exclusivity period, ON ALL DOSES WHETHER THEY WERE BROUGHT THROUGH APPROVAL BY IPCI OR PAR... and drops considerably when it's no longer under paragraph 4.

If I recall... I came up with 7.5% during Paragraph 4 and only about 2.5% thereafter... if anyone has the time or the inclination, it was a string of lengthy posts I made about a year ago... trying to come up with #s on the Focalin Royalties.

If I am right 2.5% of $17 mill is $425K... add say another $75K because June was still under Para 4 and you have $500K for Focalin royalties - which leaves $700K as Seroquel royalties on Sales of $1.7 million.

IMHO... the fault is not in the Symphony #s... but in our understanding of the royalty rates... or lack of understanding I should say.