Jim,
Dietz projection is from history of this deal type, late stage preclinical candidate. Up to 10% royalty is max, when pharma sponsor development and market drug. Giving that market is huge (multiple pain indications), 10% royalty does not sound that bad. But, it will not make NRGN significantly profitable and money-making bios.
Due to some specific circumstance related to deal, I am open for up to 12-15% royalty, but at this time it is highly speculative and there is no need to elaborate further.
As you know well new chemical entity for completely new target is high-risk business, for large pharma and specifically for small bios. NRGN is not in position to drag program for next two years and partner drug after PIIa phase. Risk is too high for REGN, and additional return for them will be few more millions and 5-10% max in additional royalty. If this deal can help them (freed finance and resource) to move other programs forward and built new base for future, so be it. They may not get max for this program, but developing multiple programs is, I will say, true path to successful business down the road. Somewhere you gain, somewhere you loose. But you are alive and with hope that time will come when you will make profit.
Miljenko |
