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Biotech / Medical : Biotech Valuation

CRSP 55.11

-2.6%

Nov 7 9:30 AM EST

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To: scaram(o)uche who wrote (9054)	9/8/2003 10:25:48 AM
From: Biomaven	of 52153

It's interesting to contrast the REGN deal with the "prototypical" Stage I deal that was discussed in the Nature Reviews article that Erik pointed to previously. nature.com That article cited a typical Phase I deal as having $5m upfront, $25m milestones and 10% royalty. The VEGF deal is about 10x richer (more than 10x on the upfront/milestones but "only" 5x on the royalty). And the $86m upfront Rick just pointed to for a Phase IIa product - that's over 8x more than the "protypical" Phase II deal. So a couple of lessons: 1. More Pharma are realizing that they have to pay up for promising early stage compounds - that was actually the thesis of that article. 2. The "terms of trade" have markedly shifted in favor of the biotechs. The previous "most favorable for biotech" deal was likely IMCL's Erbitux, but the fallout from that deal caused pharma to run for the hills. This REGN deal signals they have jumped back in the water again (in some locations you can jump directly from the hills into the water <g>). Peter

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