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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (1084)	5/11/2000 6:23:00 PM
From: Biomaven	Read Replies (2) \| Respond to of 52153

There's a significant accounting issue that was raised in the Vertex CC. This is the SEC's SAB 101, which deals with revenue recognition. Mostly I've assumed this deals with channel stuffing and long approval times for capital equipment (the semiconductor equipment companies are very unhappy about it). However, it now sounds like it may also apply to biotech alliance revenue. The question basically is when VRTX (or any other biotech) can recognize the revenue for the deals they strike. VRTX got $18 million up front, no questions asked. In the old days, they could have clearly recognized this as income. However, under SAB 101, the question apparently arises whether it needs to be recognized over a longer period - perhaps even the life of the deal. None of the examples in SAB 101 shed any light. Here's a link for the masochists among us: sec.gov (Note that implementation of the SAB has now been delayed a quarter.) Peter