Looks like Shinogi sold approximately 6.42 M worth of Rapiacta (Peramivir) and paid BCRX around 700K in royalties. That's about 11%. Not bad for a new drug in the tail end of a light season over there. Not to mention it was only available from January 28th and it is not as yet approved for children!
Chart, page 11
The same thought (progressive royalty rate)has occured to me since my original post, CT. Neither firm has announced the details and BCRX has gone as far to say "details of the royalty arrangement have not been disclosed yet." This comment was made in the CC and at the JMP meeting. Any fool with a calculator (self included) can arrive at the 11% rate with internet access and a calculator. Knowing Shinogi has made this info public, why would BCRX not announce it? The only thing I can figure is that it is not a fixed rate but a progressive scale.
Interesting post with concise good food for thought.
Fundementally....love the stock. BUT, continue to be totally amazed by how it is played in the market by factors far out of our control.
1.- 700,000 courses is a joke. Japan is the #1 consumer of antivirals with an estimate of 6-16 MILLION prescriptions in the 2004/05 flu season.
2.- H274Y mutant virus. Tamiflu useless
3.- Tamiflu banned in Japan for certain ages (up to 18 years old)
4.- 2 different doses, 5792 yen per RAPIACTA 300 mg bag
3117 yen per RAPIACTA 150 mg bag. Can't assume they are all 300mg bags
5.- Tiered Royalties. Even the $711K we got this quarter are probably on 2 tears already. From the 10Q: $711K in royalties on $6,479,450 comes up to 10.97%. Doubtful that the royalty numbers swing that way... more likely the first X Yen were at 10% and the next Y Yen at 13% or 15% or whatever. The point is $43M is most definitively not at 10% exclusively.
6.- Stockpiling. The gov wants stockpiles for 6M people. Maybe a few M this year and a few more next? Certainly some milestone will trigger with such a big order. Search on Jack's comment on stockpiling %.
7.- Pediatrics approval. Tami is not even an option because of #3. More reasons on why #1 is a joke.
No where to go but up with this one...
So then here is some more rough math.
700,000 people X 6,000 yen per course = 4.2 bil yen.
This 4 bil Yen is roughly the same as the estimate in their financial statement.
Again, this converts to $ 43 mil USD and at a royalty rate of 11 % is once again about 4.5 - 5 mil to BCRX (without including milestone payments).
Please tell me where my calculation is incorrect.