Re: Profit margin for ATryn in HD
>…regarding the eventual US 35 million Atryn HD sales, what percentage of this will be eaten up by sales expenses either by GTC itself or, presumably, a marketing and sales partner? In other words, what kind of profit margin might we be looking at?<
There are three components to the answer: selling/marketing expenses, cost of goods, and how profits are split. In the US and Japan, the profit split depends on the terms of partnership agreements which have yet to be announced; therefore, I’ll comment on the profit margin that would pertain if GTC were to proceed without partners even though we know this is not the company’s intention.
As this discussion is about the HD indication, I’m excluding R&D expenses for ATryn in acquired deficiencies.
Selling/marketing: Because ATryn will be a high-priced drug that addresses an acute-care hospital-oriented market, relatively few sales reps will be needed per sales dollar compared to most biopharmaceuticals.
COGS: As production volume ramps up, GTC’s fixed costs attributable to ATryn production will be spread over a larger sales base and will become less consequential. Helpful in this regard is that a common production infrastructure will be used for ATryn across all geographies.
All told, I would expect ATryn for HD to produce a (pre-tax) profit margin in the 65-75% range. How much of this will accrue to GTC itself remains to be seen, but the main point is that ATryn is a drug on which obtaining a decent profit margin ought not to be difficult.
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