a question, page-4

My guess is that the market saw a very low royalty number. $1m for a >200m market cap company isn't much... even if you annualise the number. It's worth remembering this was the "cost" to Biota, as DS funded all the trials and took the risk of that. 4% (or there abouts) to BTA was a fair outcome.

BUT... the value of the announcement is what it does for the currently unlicenced ROW product.

Ignoring the stockpiling market, the seasonal market has grown to around $1.4bn with Japan sales around 28% of that.

The significance is that this is the first quarter sales. Production was probably quite low, but they still managed a whopping $2.8bn Yen sales. So, say that's around 20% market share, and assume this grows to a third (with Relenza/Tami making the other 2/3rds). We now have around $333m annual sales currently unlicensed... say they get 30% royalty, 15% to BTA.... that's $45m a year. If they corner the market (like what Tamiflu did early on), and can get 85% market share then that royalty could be around $1bn*0.85*.15, or around 127m pa. Since the drug is pretty good (once only), the market could even grow further. Especially in europe and ROW.

Any then we add the stockpiling market which traditionally has been lumpy but higher.

Lot's of upside I'd say from what initially looks a small number.