Replies to post #105213 on Biotech Values

[AlpineBV_Miller]

IMGN/DNA linekr tech

Thanks for the detailed response. Is the improved linker technology apparently developed in collaboration with DNA that is the basis for T-DM1 also being utilized by IMGN for the drugs in the rest of its pipeline? If so, that gives me added confidence in the rest of IMGN's pipeline and gives me more hope that IMGN may be more than a one-trick pony. That would also make me believe that perhaps the valuation difference between SGEN and IMGN shouldn't be so great.

No problem. IGN constantly works on their TAP technology. In addition to now having both DM1 and DM4 as an attachment, they have a few distinct linking technologies. There are recent preclinical data (AACR 2010, if memory serves) from Genentech where they explored different TAP techs for T-DM1.

Also, in comparing the difference in royalty rates of 100% for SGEN vs. ~5% for IMGN, I believe we're also talking about a much larger market for T-DM1 compared to SGN-35's initial market. What the ultimate net profit is to each company is of course open to debate, but I would imagine the much larger market opportunity for T-DM1, notwithstanding the lower royalty due IMGN, should to some degree lessen the valuation difference between IMGN and SGEN.

SGEN has been saying total 100% penetration worldwide market value for SGN-35 in the r/r setting is $400M. Assume 50% of that and you have $200M. For T-DM1 to get to even that, it would have to sell $4B. I like the drug, but I don't think it gets to $4B.

As to Dew's net/gross question, working from memory I believe the only outbound royalty is a tiny one for maytansine.