Good question, this is the part I’m least confident in. Moberg took all the risk in pharmaceutical development and most of the risk in clinical development. And the deal is for exclusivity. These facts imply a higher % to MOB than the 25/75 rule of thumb might suggest. It could very well be something like a 40/60 split with lower COGS than assumed here. This is the one bullish liberty I’ve taken.
I’m basically laying out a bear case with Europe. What happens if the US doesn’t exist, if the P3 fails. If I assume the P3 is great and they sell in the US, isolating the EU as a valuation tactic is unnecessary.
I don’t have a firm view on the shape of the adoption curve. Judging from how it’s selling in Sweden, I wouldn’t be surprised if it got there in only a couple years. But that point isn’t important at these prices.
why do you think gross profit split b/w Bayer and MOB will be even? Thank you
Good question, this is the part I’m least confident in. Moberg took all the risk in pharmaceutical development and most of the risk in clinical development. And the deal is for exclusivity. These facts imply a higher % to MOB than the 25/75 rule of thumb might suggest. It could very well be something like a 40/60 split with lower COGS than assumed here. This is the one bullish liberty I’ve taken.
thanks - i'll try to look into it. is 25/75 the 'market standard' or where did you come up with your rule of thumb?
Google “25 percent rule pharma licensing” or something and you’ll find plenty of articles discussing it or refuting it.
Why do you go with the current label, as opposed to the US trial dosing regimen? (8 week daily + 40 week weekly application?)
I’m basically laying out a bear case with Europe. What happens if the US doesn’t exist, if the P3 fails. If I assume the P3 is great and they sell in the US, isolating the EU as a valuation tactic is unnecessary.
Makes sense, thank you!
At what year do you think this level of market penetration/creation in Europe makes sense? ~27-28?
I don’t have a firm view on the shape of the adoption curve. Judging from how it’s selling in Sweden, I wouldn’t be surprised if it got there in only a couple years. But that point isn’t important at these prices.