Explanation for the divergence between Roche tamiflu sales fall vs Gilead's royalty rise is due to Gilead being paid royalties one quarter in arrears ie Gilead's March 2010 quarter royalty is based on Roche's December 2010 quarter. Gilead's next quarter earnings will reflect tamiflu sales falling off a cliff in the first three months of 2010.
Anyhoo, here is extract of Gilead's earnings call transcript:
"Tamiflu royalties for the first quarter were 246 million. These royalties, which are paid one quarter in arrears, reflect a royalty rate of approximately 22% as applied to Roches net sales of Tamiflu during the fourth quarter of 2009. As you may have seen Roche reported the first quarter of 2010 on in last week. The 570 million switch box in Tamiflu sales.
We therefore expect that the Tamiflu royalty revenue that we will report in the second quarter of 2010 will be approximately $78 million"
I still cant see GSK/BTA reporting a blockbuster sales figure nxt week.
BTA Price at posting:
$2.11 Sentiment: Buy Disclosure: Held
