Replies to post #98170 on Biotech Values

[n4807g]

yes....two years of waiting and the investment finally pays off!

[wallstarb]

I am suprised that they didn't get much upfront and only $90m on approval. Sound slike the deal that TSPT got last year. Except when TSPT got that deal TSPT has $6 a share in cash and it had a $70m market cap. ARNA has a $400m diluted market cap - so this $$$ isn't that big a deal and the upfront is about $0.45 a share.

Might be a decent short if it gets much of a pop (or a fade) seems like a SELL THE NEWS event - the best time in my experience to fade something like this is about 1/2 - 1hr after the open - after the squeeze attempt.

[mcbio]

Re: ARNA/Eisai Lorcaserin deal (economics)

I assume this is a fairly novel type of arrangement in terms of the economic structure. Most deals tend to be based on royalties or they are some type of profit-sharing arrangement. Regardless, can't we just think of the 31.5-37.5% less production cost as essentially equating to what would otherwise be a royalty? Also, any guess on what production costs for Lorcaserin will be for ARNA? I'm curious as to what kind of estimate we can ultimately make for ARNA's net profit % on Lorcaserin sales. Given that Lorcaserin is a small-molecule drug, I assume production costs won't be too steep and that 31.5-37.5% will not drop too much in arriving at the ultimate net profit %.