The target cancer, cc, is deadly. Not that so many other cancers aren't, but a drug effective in stopping/slowing down cc is worth a fortune. Does anyone remember Genetech? When Avastin was successful in its phase three for cc is when it skyrocketed. If Perifosine phase three for cc is a success you're looking at KERX with N.America rights at $20, and AEZS with KERX royalties and ROW rights at $12. Many times more than a double/triple on both. IMHO only.
Over time AEZS will earn far more than KERX as Perifosine is sold throughout the world, mostly through partners who pay AEZS in two ways for the drug.
As I understand it, AEZS controls the manufacture of the drug for worldwide distribution. I believe they supply drug to partners on a cost plus basis, so there should be a profit from its manufacture. Then AEZS receives a royalty on sales which I believe is double digit on the sale price, not on the earnings of their partner.
I certainly don't know what the real numbers are, but between selling product and royalty on sales, I've got to believe if sales are a billion, AEZS should earn something between $150 million and $200 million when combining the profit on manufacturing the product with the royalty on sales.
The North American market represents roughly 35% of world sales. KERX or whoever buys it may sell $350 million of the worlds billion in sales. A drug company does very well if it earns 30% on sales, so KERX may earn roughly $100 million. Not bad, but remember KERX put up the funds to gain approval, probably into the hundreds of millions. To my way of thinking, I'd much rather be AEZS, the creator of the drug, and the company that will profit on its manufacture as well as it's sales anywhere in the world.
I think we're underestimating the value of the "double-digit royalties" statements each of our partners have made (I believe each?) with regard to their sales of Perifosine. If the royalty percentage was 10%, why not just say so? I don't see it being over 20%, because the partners have to make money too. All wild speculation at this point but the main points I'm looking foward to in 2012 are:
1) The milestone payments to prevent short-term dilution 2) The royalties paid by partners to AEZS upon Perifosine sales