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

To: scaram(o)uche who wrote (2427)	12/31/2000 1:54:58 PM
From: tuck	Read Replies (1) \| Respond to of 52153

This excerpt from the latest CEO's message @ Immunogen has some interesting valuation related talk, emphasis mine: >>ImmunoGen's future is closely tied to the use of our tumor-activated prodrug (TAP) technology platform in products that we can develop with our internal resources. We call these pipeline products. huC242-DM1 was at one time a pipeline product. It no longer is because we licensed the worldwide rights to the product to GSK. Although we will get a nice royalty from GSK on their sales of the product after approval, and although we have already gotten $14 million in cash from them toward a total milestone package of $41.5 million, our return is not the same as if we had held on to the rights to the product at least through Phase II clinical studies. After all, we negotiated the agreement with GSK when the product was nearly a year away from clinical trials, and we had almost no cash. The situation at ImmunoGen is much different now. We can afford to hold on to products through Phase II, and we can then negotiate much more lucrative deals. For example, it is not unusual to see large pharmaceutical companies pay royalties in the range of 30 to 40% on products that have shown robust efficacy in Phase II. But where will those products come from? For the most part, they are TAPs derived from antibodies that we or others prepare against cancer targets and push through our pipeline. It is these targets that represent the input to our pipeline. Having the additional cash that our recent financing provided offers us much more opportunity to find and purchase validated targets to develop into products. We can afford to fund clinical development now, and therefore make choices that can potentially yield huge long term return.<< Message 15101307 Seems to support the idea of finding those cash-strapped big science companies. Because when they get the cash . . . Cheers, Tuck