MSB chart, page-131

"Accounting for Risk" when valuing a Biotech Company.

Phase I clinical trials have a 15% probability of becoming a marketable product. For those in Phase II, the odds of success rise to 30%, and for Phase III, they climb to 60%. Once clinical trials are complete and the drug enters the final FDA approval phase, it has a 90% chance of success.

These improvements in the odds of success translate directly into stock value.

Derisking products enhances the chance of Partnering deals and potential cash flow from peak sales.

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Graft vs. Host Disease (GvHD)

A conservative value for GvHD alone could be around US$200-US$300m.

This assumes a deal size of US$220m, including US$20m as upfront and another US$25m as near term approval milestone for the paediatric indication.

It is expected the balance to be paid as sales milestones with a portion attributed to approval for the adult indication.

It is assumed,

1. A lower upfront to take into account the cost of an adult post approval trial
2. High double digit royalties of 25%.

Estimate peak sales of ~US$120m for MSC-100-IV in the US