Replies to post #240185 on Biotech Values

[DewDiligence]

Re: ENTA’s Mavyret royalty rate in 3Q21/4Q21

ENTA’s royalty schedule is shown in #msg-142808661.

Let’s take 3Q21 first. Mavyret sales for the first half of calendar 2021 were $857M, and 50% of that (the base for calculating ENTA’s royalty rate) is roughly $430M. Hence, $140M of Mavyret sales during 3Q21 ($70M of the royalty base) will pay ENTA at the 10% tier and the remaining (roughly) $290M of 3Q21 Mavyret sales ($145 of the royalty base) will pay ENTA at the 12% tier.

Now, let’s take 4Q21. Mavyret sales for the first three quarters of calendar 2021 were $1.28B, and 50% of that (the base for calculating ENTA’s royalty rate) is $640M. Thus, the first $220M of 4Q21 Mavyret sales ($110M of the royalty base) will be at the 12% tier, and the remainder of 4Q21 Mavyret sales will be at the 14% tier.

According to ABBV’s updated full-year 2021 guidance of $1.7B Mavyret sales ($850M royalty base), the 17% royalty tier will not be reached during calendar 2021.