VERY Rough BOH calc has ITMN 2x VRUS market cap. I realize Pharmasset's earlier stage Polymerase compounds are not partnered (I don't follow them close enough to know if they owe any significant royalties). However I don't think much value gets attributed to them now anyway. If we just compare HCV programs: 1. ITMN gets profit share in US and mid teens royalty x-US for 191. I did a quick search and didn't see terms for Pharmasset my guess is high single digits but maybe someone can correct me. Yeah Pharmasset doesn't pay development costs. 2. Pharmmasset has 2 next generation polymerases that are unpartned the more advanced has recently started 1A. I don't think you can put much value here yet but I wouldn't argue those wanting to give some. 3. InterMune's deal with Roche covers any additional compounds in terms of profits/expenses and milestones with the exception of Roche paying 100% through Phase 1 and no up-front. I think they are fairly close (~1 year) at getting a second compound to the clinic). I would value this on par with #2. Both speculative early stage but having Roche backing and strong deal terms in this market is worth similar (granted both small at this point).
If I am close on the Pharmasset royalty and both drugs have equal chance of getting to market with similar pricing, I would value ITMN's HCV program at a minimimum of 2x Pharmasset's and probably closer to 3x.
Then you have Pirfenidone which probably has as many people shorting the stock as betting it will get approved :-).
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