Tuck, $400 million represents the top of the USA-Canada market. If that
figure were to develop, under the terms of the ABT royalty agreement,
which pays a 36% royalty on sales over $141 million per year, 10.8
million outstanding shares of BTIM yields 13.33 a share gross revenues.
The ABT royalty is an interesting sliding scale royalty, with a
"meeting of the minds" at $140million. using that figure, which seems to
be based on hextend taking all the existing heavy starch market -doable
becuase ABT already has 1/2 of it-- expanding that market, becuase hespan
has a limit in use caused by its high salt content, and eating into the
albumen market of roughly $300 million, doable becuase albumen is very
expensive, seems to have limited effect, and the FDA has warned that it's
use may be dangerous, then $140 million seems acheivable near fairly
soon.
Using $140 million as basis, BTIM receives around 4.64 per share as
gross. in addition, they receive 10% licensing fees for the first $375
million in sales. That 37.5 million is more than twice the size of the
accumulated deficit over 8 1/2 years, including all R&D,
administration, etc.
Since the ABT deal is only for USA-Canada, the fact that BTIM has
already gotten a letter of intent from Nihon for the Asia market, and has
been working to establish European partners could easily mean that the
$140 million figure can double for world-wide.
The ABT agreement is discussed in BTIM's last 10k-405 on page 11.
sec.gov |
