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Biotech / Medical : Biotech Valuation

CRSP 56.22

+1.6%

Jan 13 3:59 PM EST

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To: Spekulatius who wrote (10406)	2/12/2004 7:44:53 AM
From: Harold Engstrom	Read Replies (1) of 52153

>>The cost of clearing a single drug past today's legal, regulatory and marketplace hurdles has risen to $1.7 billion<< It definitely does not cost $1.7B to get a single drug approved, but perhaps that is the average cost when you factor in all the failures and all other costs in the industry. I work with small and large pharmaceutical companies and none incur that kind of cost - that I know of. Trial costs vary depending on indication, but if you assumed $200MM for a series of trials culminating in a large PIII for a complex indication then I think you would be covered. A new MAB facility for one product might run you $150MM for large-scale production. Add it another $150MM for preclinical and discovery and support and maybe it costs $500MM (my guess.) But there are plenty of ways to do it more cheaply until approval: you can use contract manufacturing, your trials can be smaller and you can use tools to improve efficiency. You can probably still do for under $200MM.

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