10%, not 25% royalty on ilo. As Emily Litella used to say, Never Mind. Ouch, ooooch.
(Actually, not quite never mind - reduce the earnings and share price targets in my giddy projections by 60%. 10% of $600 million is a $60 million royalty / 24.7 M shares = $2.43/share. With a 35 PE (probably low), about $85/share based on ilo alone. Still not too shabby.)
I'm embarrassed that I didn't catch the error in 25% before I posted - I sort of registered that 25% was better than I remembered, but in the good cheer of Friday afternoon -- the end of a terrific week in TTP, CLTR and PCYC (and Ann Arbor weather), and I'd seen you and Peter having some fun doing missionary work among the "jerk daytraders" on the BCRX thread Message 11084513 and Message 11086008 - I didn't pause to check.
For my penance, I've tracked down some references to the ilo royalty rate, which turn out to be pretty equivocal.
Peter reports the "consensus": >> The [iloperidone] deal is somewhat unusual, because the drug was developed by HMR, licensed to TTP and then licensed to Novartis. The consensus on the threads is that Novartis will pay a 15% royalty to HMR and 10% to TTP. (I have no personal knowledge of the accuracy of these numbers).<< Message 8082836
TexasDude gives the ilo royalty number as 10% in the introduction to this thread, which number appears to derive from Sturza's admitted estimate, see this from 2/98: Message 3448999 ("an undisclosed royalty on net product sales, which we estimate will be in the 10% range.")
None of the sources I've found here are unequivocal, and they may all stem from Sturza's "estimate", not from anyone's actual knowledge.
Which raises the question, do we know the royalty rate with any firmness, or do we have just a "consensus", just "received wisdom" flowing from Sturza's (possibly wide) estimate? Any thoughts? Any better knowledge?
--Bob |
