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Biotech / Medical : Incyte (INCY) -- Ignore unavailable to you. Want to Upgrade?

To: smh who wrote (1686)	2/4/2001 4:07:40 PM
From: CYBERKEN	Read Replies (1) \| Respond to of 3202

How old is the 30,000 figure? End of '99? How many licenses are out there now? How does the company keep track of the progress of this mass? Do INCY's efficiencies increase the probability of discoveries getting to the IND stage? The NDA stage? These are all questions I would not expect a Wall Street analyst to be competent enough to answer. But logic would suggest that the company has some ongoing research in this area, and will eventually be able to provide some kind of guidance. One could start by speculating that 30,000 licenses would boil down to X number of approved drugs over 4 to 10 years, and that Y% of these would have annual sales of $1 billion, while Z% would have average sales of, say $100 to $200 million. Then apply a 1% to 2% royalty. And finally make an estimate for similar future growth based on the quality of INCY's current R & D, as well as their leverage on future deals (maybe they could lock in 5% to 8% royalties after some spectacular successes). The Street, IMO, gives all of this a zero value today because there simply isn't enough data to perform the reasonable calculations. We who invest are simply optimistic about the probabilities. But as the development processes of INCY's partners progress and mature, the company may be able to issue more specific (even if conservative) estimates of the future potential cash flow. At least there's little chance that investors hopes will be left hanging on the fortunes of one or two drugs-with $500 million to $1 billion already sunk into them-riding on the whims of a rather obtuse and sometimes cynical Food and Drug Administration. And we don't have to worry about our mop jockeys calling in sick on Mondays and Fridays...