Depends on the structure right? I'm suggesting a base case deal structure (on successful phase 1 results). And some NPV' to put into persepctive the sheer value on our hands if this gets legs.
Do NYR want cash up front, then royalty is lower (2% is just a number I plucked, I could be well off the mark), maybe its more cash than $50m as an upfront - great for NYR if that's the case... No cash, then yep higher royalty - but that means a long wait until you might actually get any cash, and you might never get cash if it doesn't get to market.
The likes of a Pfizer will highlight how it took 10yrs to get Atorvastatin approved, and the $, and the reduction in time on patent to monetise in their side of the argument to keep the royalty down (and an upfront for that matter too).
As a coy with other opportunities in the pipeline, NYR will 100% take a cash upfront, even if the NPV is lower than a bigger royalty. They can use the cash to progress the other opportunities in their stable, and they would have realised a real return.
The structure could be more complicated, multiple cash payments along the way, an initial upfront, with milestones for certain achievement on phase 2 & 3 etc.. Again a lower royalty, and also more preferred if NYR is considering it needs cash along the way for other compounds.
Would be great to know some recent deals in the Bio space re upfronts and royalties to get some perspective - fire away if you know of any..
Cheers.
NYR Price at posting:
30.0¢ Sentiment: Buy Disclosure: Held
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