The Perfect Storm, page-37

A bigger picture How do I value an assay?

OK there are 94m smokers in the US of whom, 1.5 could be tested using and in-licence test (as per ann of 5/3/12).

Price of a comparable product is $475 so lets assume $400 is the price. I could assume 2- 4% royalty (they won't tell me) so that would be $8 to $16 royalty per test. At $8 per test, 1.6m tests pa would equate to $12.8m pa though it could be half this if the test comes to market @$200.

Then comes the external and sales potential. Ten years ago, 1.1 billion people smoked though most would not be able to afford any form of blood test. Plenty of guys in places like Japan or Turkey can afford an occasional test.

Competitors? There are a few tests entering the market, however CDY as an IP holder is not wedded to any particular brand of test. All will compete of diagnostic statistics so it is likely that most will incorporate mk for tests aimed at initial diagnosis at some stage. Why? Statistical relevance!

So .... maybe $10m + royalty pa for a NSCLC test but it may take a year or three to get there.

cheers