Replies to post #67116 on Biotech Values

[DewDiligence]

Re: IDIX royalty income

>Do you have any ideas what the NVS royalties could amount to, roughly? Just a minimum/maximum range.<

As of the most recent quarterly numbers (which are reported with a one-quarter lag, e.g. IDIX’s royalties booked in 2Q08 corresponded to NVS’ drug sales in 1Q08), Tyzeka/Sebivo was selling at an annualized rate of approximately $35M. Based on JP’s comments today, NVS’ sales have presumably increased to, say, a $50M run rate.

IDIX’s royalty income is based on a complex formula that has not been disclosed (#msg-24405569); however, it’s reasonable, IMO, to use a 20% figure as an estimate.

Thus, the short answer to your questions is that IDIX can expect to book about $10M in annual royalties given NVS’ current sales level.

[DewDiligence]

>I cannot help but to ask what you do/did to put bread on the table? I would assume that you work or worked at one time for a pharmaceutical company.<

I wear two hats: i) managing my own investment portfolio; and ii) advising a private foundation on how to manage its investment portfolio. There is some DD overlap between these two jobs.

I’ve never worked in the pharma industry, but I have a background in math, software engineering, publishing, and tournament backgammon, all of which are helpful for biotech investing, IMO. Regards, Dew

[DewDiligence]

Re: IDIX royalty income

Do you have any ideas what the NVS royalties could amount to, roughly?

On today’s CC, the CFO said IDIX expects royalty income of approximately $4M for 2009, which is less than the $10M annual figure I mentioned in #msg-32683976. The difference is not due to declining sales of Tyzeka but rather to my having screwed up by overlooking that the revenue line in IDIX’s income statement includes amortization of milestone payments previously received from NVS and does not consist solely of royalty income.