@Sector . Please allow for Temcell royalties paid quarterly in...

@Sector . Please allow for Temcell royalties paid quarterly in arrears (I think from memory) and allow small adjustment for fiscal reporting year ends…31st March for JCR Pharmaceutical …then apply reported royalties received in Mesoblast statements. Also I cannot be certain that JCR sales are shown pre or post royalties as I am not party to the actual details…but this shows I am there or thereabouts ! There were also some incremental tiered bonus amounts which I think equated to approx $0.5m for each $5m of cumulative royalties received up to approx $25m in total (I think ) .


Key Financial Highlights for the Quarter from Mesoblasts reporting documents

“Revenues from sales of TEMCELL®1 HS Inj. by Mesoblast's licensee for aGVHD in Japan continued to

increase and were US$2.1 million for the quarter ended March 31, 2020, a growth of 99% over the

comparative quarter of 2019. On a rolling 12-month basis to March 31, 2020, revenues were US$7.6

million, an increase of 75% relative to the prior corresponding period. “


So let’s say we make an arbitrary small one quarters adjustment for fiscal years where the first quarter of JCR FY21 was much higher than the previous 12 months which were (affected by temporary closure of the production facility leading to tight inventory restrictions affecting sales as referenced in the abstract below) , we can assume Temcell over the same fiscal period made approx Yen 2700m (approx US $23.4m )…whilst Mesoblast received US $7.6m over roughly the same period.

So if royalties represented approx US$6.6M of the $7.6m under this scenario (with the balance represented by bonus tier payments of approx $1m) then the percentage royalties would be 6.6/23.4 = 28% .
I will leave you to do the same exercise for other financial periods so you can backtest.


So not only have I illustrated very significant royalty percentages but also you have learnt that JCR are able to afford to pay these level of royalties despite much lower pricing for Temcell in Japan.
Please do not ask me to add up the number of cells per average treatment to convince you that 6m cells for our chronic lower back equates to COGS of a few hundred dollars. Just accept now you are wrong because this is getting really boring for everyone .

You might have to wait some time for the next lesson as I am not receiving payment for this schooling !