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Alexza Pharmaceuticals Inc. Message Board

  • moaamar1778 moaamar1778 Jun 19, 2013 10:28 AM Flag

    my take on royalties

    I think that with such high milstons, royalties will be no more then 3 - 7%. And that is good enough for me because all manufacturing costs are covered before royalties are calculated. Look at other licensing deals snd and see the common % . Do not expect double digits here.

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    • moaamar1778,

      I believe that you are way off. The range of 3% to 7% is only reserved for drugs that are off patent and Teva is licensing to make a generic version .

      When you look at a branded, specialty drug that is patent protected at least until 2026, the tieed royalty percentages will be a lot higher.

      I suggest that you go back and look at the Teva agreement with OncoGenex Pharmaceuticals (OGXI) that Teva signed in 2009. The tiered royalty percentage range for OGXI drug, OGX-011, was 15% to 25%. However, OGX-011 was in Phase 3 development at the time of the Teva collaboration agreement, and OGX-011 was not approved by the FDA or EMA. In fact, OGX-011 is still not approved by the FDA or EMA. Therefore, the tiered royalty range for ADASUVE US rights should be higher than the range Teva is paying for OGX-011.

      I will tweet the link to the Teva collaboration deal with OGXI @ATLnsider.

      The advantages that Alexza has with ADASUVE over OGX-011 are:

      1. It is patented until at least 2026

      2. ADASUVE has been approved by the FDA, so there is no (0) regulatory risks for Teva

      3. ADASUVE has been approved by the EMA

      4. Teva will start selling ADASUVE in a few weeks, and will start getting a return on its investment in ADASUVE soon

      Sentiment: Strong Buy

    • look for 10% on the bottom and 20 plus on high side. you then need to factor in milestone payments and look at the whole number over the course of 5 yrs.

    • This is not happening. For example Potiga from Valeant was licensed from Meda with co-development and they got 5-7%. Teva had nothing to do with this.

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