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.
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
Think that you are the one who is way way off.... the example you presented has nothing to do with the ALXA-TEVA deal. Look at similar deals, where you can see high milstons and all production cost+ other expenses. covered. Most of the royalties are embedded within these payments!!! Prove me wrong on that before telling me I am way off...