Guilford (GLFD) - Steadily Rising Message Board

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Biotech / Medical : Guilford (GLFD) - Steadily Rising

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To: SteveG who wrote (61)	8/23/1997 2:37:00 AM
From: John Dwyer	of 496

Steve, Could you elaborate on the dollar amounts you attributed to milestones for selection of the first two indications? You stated that GLFD would receive $56 million for the selection of the first indication followed by $42 million for the second. These seem awfully high to me. GLFD could receive $392 million if all ten indications make it through to approval... this is about $40 million per indication per _approval_. I can't see why Amgen would pay a large milestone up front... what will GLFD receive for approval? Is this on some sort of sliding scale? Another minor point... the $35 million is composed of $15 million in cash plus $20 million in equity and warrants. So GLFD only sees $15 million in their coffers plus the $13.5 million for R&D. They are burning roughly $5-6 million per quarter. So this gives them about 5 quarters of money. Add in the milestones and they make out pretty well in the short run. However, think about this... they get only $400 million for _ten_ indications. Assume (conservatively) that each indication will yield $200 million (I have no idea about the dollar amounts for these markets but I am sure that some are higher and some are lower). That's about $2 billion in market size in total. Correct me if I am wrong, but it appears that GLFD only gets royalties (maybe one co-promotion) for these indications which will likely pay substantially less than a 50/50 deal. It seems that GLFD has not retained the upside in this deal. Don't get me wrong, I really like these guys... my wife and I were grad students at Hopkins and my wife rotated through Sol Snyder's lab. However, I thought that the immunophilin program was worth a lot more than this... I think GLFD lost out on too much of the upside potential. John

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