Replies to post #107005 on Biotech Values

[DFRAI]

10nisman
i remember that a total number of 65-70 million was discussed where mnta share would be 30-35MM?

[poorgradstudent]

>Where did you and Dew hear it was based on total net profit?<

I'll defer to Dew on this one as he posted rather explicitly on it previously. I'm not sure where he heard it, but I'm simply going off his notes.

Intuitively, I think it would make sense for NVS to shape the contract so that their reimbursement is a priority. Claiming their reimbursement right after the COGS is subtracted protects them and their shareholders.

In the way you're calculating it, NVS is deferring the priority of their reimbursement. I don't think they would get pushed around by MNTA that way during the negotiations ;-)

>Based on your previous message is it correct to assume you believe MNTA owes ~$60 million in total co-development reimbursement?<

Again, I was just going off a number that was thrown around the board more often than the other numbers. If the COGS are around 90 million as you suggested, I think it is safe to assume that a majority of the reimbursement obligation (>80%) will have been easily paid off, if not completely.

[DewDiligence]

It makes no difference to the end result whether: a) NVS applies 50% of the Lovenox operating profit toward recouping its development costs and then gives MNTA a 45% share of the remaining 50%; or b) NVS allocates 45% of the entire Lovenox operating profit to MNTA and then applies 50% of that toward recouping NVS’ development costs before arriving at the amount to pay MNTA. In either case, MNTA ends up with 22.5% of the Lovenox operating profit until NVS has fully recouped its development costs.