Replies to post #133764 on Biotech Values

[dumaflotchie]

It seems to me that MNTA receives the equivalent of half it's market cap in Baxter support in this FoB development which essentially negates the drain on its capital during the next 3-4 year development period. That doesn't seem unwise under the circumstances.

Further, there was no necessity to do a deal at this moment in time so I rather think MNTA was satisfied with the deal as it stands. It isn't as though this company was on its last stand without capital coming into its coffers. Some here seem to imply a near desperation to do a FoB deal but that just doesn't jive with their circumstances.

They are establishing many truly legitimate shots on goal.

[iwfal]

Wrong interpretation, IMO. It’s not that the companies expect the market share for interchangeable FoB’s to be lower than I think it will be, but rather that there’s a non-trivial risk that interchangeable FoB’s will not pass muster with regulators. Since BAX is bearing a sizable portion of this risk, BAX is entitled to be compensated for this risk in the way the deal is structured.

Suggest:

1) I might accept this as an explanation for the 9 pct - but it isn't the part of the deal I find low - because it isn't the part of the deal that focuses on MNTA's special sauce and I wouldn't expect much recompense in such a competitive space.

2) the 18 pct part is the part that appears telling. Under your supposed position (40 pct market share) I'd expect price erosion of no more than 50 pct. And thus a GM of 70 pct or so. Thus BAX gets about 2.5x the share of Gross Profit as MNTA when the thing that MNTA brought to the table has borne fruit. I think this is strong data that they expect much more competition than you do.