Replies to post #105741 on Biotech Values

[mcbio]

Re: Roche/ITMN/ACHN/IDIX

175M is a fair chunk of money (that is more then Achillion's market cap and 2/3 Idenix's)...

If one believes this was money spent to get out of the HCV exclusivity deal with ITMN, then I interpret this as all the more reason to believe that Roche can afford a new partnership with ACHN or IDIX. ; )

[turtlepower]

ITMN could have opted out and saved development expenses according to whats in the 10k.

Due to cash constraints or for strategic business reasons we may decide to take certain actions that reduce our expenses. For example, based on our current anticipated timelines, during certain periods, one of which is in 2010, we will have the right under our collaboration agreement with Roche to opt out of the participation in the future development expenses of RG7227. If we elected to exercise this opt-out right, we would no longer be obligated to pay 33% of the development expenses related to RG7227 and Roche would thereafter be responsible for paying 100% of such development expenses; in lieu of receiving 50% of any profits in the United States to which we would otherwise have been entitled, we would receive royalty payments in the form of a percentage of net sales of RG7227 in the United States in the range of the high-teens to low-twenties percent; and we would receive larger milestones in connection with the filing and approval of our NDA in the United States. In addition, we would receive higher royalties on net sales of RG7227 in the rest of the world, and we would retain our current rights to receive all other milestones and our exclusivity rights would remain unchanged. Thus, if we decide to exercise our opt-out rights due to cash constraints, we would incur less expense but our rights to share profits from sales in the United States would be terminated and as a result our business and future financial results could be adversely effected.

Looks like they wanted the extra cash rather than hold on to 191. It also looks like Roche could have easily walked away from the agreement themselves so it looks like they may see some value in 191. Probably a deal beneficial to both parties. ITMN has a non dilutive way of getting money until an EMEA decision and Roche can do what it wants with 191.