Replies to post #170035 on Biotech Values

[DewDiligence]

ENTA—the ABT-450 component should garner more than a third of the contribution to efficacy given it really is the backbone of the cocktail…

I agree and that’s why my valuation model in #msg-92234861 ascribes 35% (rather than 33.3%) of the regimen’s value to ABT-450. I think the 35% number is conservative, but absent the terms of the contract, we can merely guess.

When my 35% figure is combined with ENTA’s blended royalty rate from multiple royalty tiers (which is also based on educated guesswork), the bottom-line royalty rate in my valuation model is 5%. Thus, if ABBV sells $3B per year of the 3-DAA regimen (and, for the sake of discussion, ABBV sells $0 of the 2-DAA regimen), then ENTA gets $150M in pre-tax royalties.