Replies to post #107012 on Biotech Values

[dink00]

Doesn't it make a difference in how much faster the development costs are paid for?

22.5% is reimbursement in one case and 50% is the reimbursement in the other case. In the second case, MNTA pays off reimbursement faster no? What am I missing?

[exwannabe]

Re: MNTA royality accounting

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.

This is true as far as this Q revenue goes, but in PGS's version (which I do not believe) they paydown reimbursement has doubled (from .45 x .50 to .50). The extra money is because NVS is paying the reimbursement charge with half their own money.

Which is why I seriously doubt the deal is structured as PGS thinks.

As to some post speculation that the profit that is split already includes the MNTA expense, this is just not the way anybody would structure the terms. The effect would be a reduction of about 1/3 (whatever .45 / 1.45 is).