John,
I liked the deal, however I would tone down the assumptions thrown about here as well. If just one product or indication hits the market within 5 years it would be an accomplishment. On that note, is it known if any such indication is ready to enter human clinicals yet? I don't think at this point, thus tack on a year before a compound hits human clinicals and the 4 year development cycle plus FDA approval is very aggressive to say the least.
The 20% rate mentioned is just a rumor with the actual rate undisclosed, so who knows. If 20%, however, I do not feel they gave anything away. 20% is not far off a profit split. My assumptions, however, would use more conservative rates.
So I guess much of this deal hinges on successful development, wise choices by GLFD for their co-marketing indication and a nice sized royalty. I'd break it down even further and say that if these compounds are developed successfully this will be a smash for GLFD, assuming even a more modest royalty rate in the high single digits.
AMGN has the money to develop these compounds on a more aggressive timeline than GLFD. Further, this allows GLFD to step up development of their wafer products which they have a strong position in and continue their internal r&d.
As much as I like the deal, I am planning on taking my time reentering GLFD and am hopeful of a lower price. Given a long development cycle I believe there is plenty of time. |
