Replies to post #604 on Biotech Values

[DewDiligence]

Re: Characterization of the Macugen deal:

>> I don't have a good feel for Big Pharma / development-stage biotech deals. Would you characterize this deal as "front-end loaded" or "back-end loaded"? <<

Somewhere in the middle, but closer to the back-loaded pole than the front-loaded pole. We can’t say for sure because EYET’s royalty on PFE’s Macugen sales has not been disclosed. My guess is that the royalty is relatively low, perhaps 10-15%; if I’m right, this can’t be characterized as a true back-loaded deal.

On the other hand, about 60% of the total $745M in combined up-front and milestone payments is based on post-approval milestones such as attaining specified sales levels. So this deal is not front-loaded either. Maybe the best descriptor is “mid-loaded.”

Great question, BTW. Glad you asked.