super bugs need new super drugs, page-5

"Well, obviously there is some doubt as the MC for PYC is only $25m."

It goes back to the whole paridgim shift by big pharma to milestone deals to cut back on the big costs & the high amount of cash they where efectively throwing away at drugs & partnerships that went nowhere, there have been quite a few great articles on it over recent years. While for small biotechs it appears great as investors are able to see what the collaboration "may" be worth over the longer term but at the same time it allows big pharma to get their claws in for minuscule sum, if the collaboration delivers then they are right there waiting if on the other hand it doesn't then there is no loss to them they can easily walk away & right it off unlike the old days where they would pay $20M+ upfront for something that went nowhere. Look at Roche for example they have about 80,000 employees the avg. upfront PYC charges would be the equivalent of a few employee's salaries. Milestones are a great move by big pharma to mitigate risk. Look across the globe milestone deals don't really raise the value of a company it's when they start to deliver investors will add the value accordingly, i know Galapagus has been posted alot recently & it's a good example the value of the company is based on the large yearly revenues not the gigantic "potential" milestone cache but the one that delivers.

Anyway i guess that was a long way of saying that it's not neccesarily some doubting the potential but a general method the market has moved toward to value milestones across the whole sector - upfronts allow something tangible to add value milestones only offer the potential. Very few actually get to the point of achieving all milestones. Maybe we'll get to be one of the select few & i guess that fits with the initial business model of "hands in many baskets" with multiple partnerships.

It has to be getting mighty close to atleast bringing cash sustainibilty forward for the company though.