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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (3267)	6/8/1999 5:03:00 PM
From: Art Vandelay AIA	Respond to of 10280

Regarding the royalty rate. It starts at approximately 5% and escalates based on sales. The initial analyst range was from 5 - 8% based on sales levels. It was interesting to read that PFE only pays COGS plus 12%. That means that UCB only gets 12% plus manufacturing profit from PFE and they discovered the product. My guess is 15 - 20% total pre-tax. The 5% ish number is probably based on the fact that UCB paid for all the development expense. In the future it is likley that SEPR will get 5 - 20% (maybe averaging 10%) depending on the uniqueness of the product and the extent that they have moved it through the clinic. Prozac and Propulsid are apparently examples of unique products with royaltiy rates growing to over 10% with minimal clinical work.

To: Biomaven who wrote (3267)	6/8/1999 11:10:00 PM
From: David Howe	Read Replies (1) \| Respond to of 10280

<< One easy and interesting thing for you to do with your model is to break down the present value of each drug in the model. In other words, if your current PV is say $90, show that Allegra makes up $5 (or whatever) of this. If you want to be more elaborate, you could also show the percentage contribution of each drug for some different discount rates. >> Peter, Good idea and it's something that I've already formulated on a revenue basis. When I have a free minute I'll breakdown the pipeline and show each products % contribution in terms of revenue and earnings (potential). Dave