The approval triggers a $10.5 million payment to ImmunoGen and sets the stage for the company to receive royalties of between 3 and 5 percent, depending on sales. The 5 percent level is triggered when sales top $700 million in the United States. The company also receives 5 percent when sales top $700 million elsewhere in the world.
Analysts estimate the drug could generate annual peak sales of $2 billion to $5 billion, assuming it is used earlier in the disease's progression and for longer periods of time.
by 5% of total sell, IMGN can get 0.1-0.25 billions per year.
The $100 MILLION to $250 MILLION annual ANNUITY is the icing on the cake, and the tip of the MOUNTAIN of value that is IMGN. Suggest you do your DD on the rest of the VERY SUBSTANTIAL IMGN cake before you SHORT more.
Reality, it is EVERY biotech's dream, to have an ANNUAL (virtually Infinite annuity) revenue stream of HUNDREDS of MILLIONS of dollars. Oh, and don't forget about our NOL's. They mean all that CASH is ours, and no tax man to pick out pocket. :-)
seems to me that with tdm1 costing twice as much as herceptin, we should exceed the 4 billion in current sales fairly easily. I'm going to say we hit 10 billion in sales world wide which is just under 500 million in royalties when you take the 3% royalty step into consideration.
divide that by 100 million shares outstanding gives you $5 per share in income just from tdm1. This would equate to $75 share price at a conservative 15 PE. Add in the revenue streams from wholly owned drugs down the road and you're gonna get over 100/share pretty easily.