Hi thereI understand that Dr Reddy gets to pocket some profits...

Hi there

I understand that Dr Reddy gets to pocket some profits on sales before ACL starts earning its 50% share in order to compensate Dr R for certain pre-launch costs.

I understand that figure might be around $9 million.

The question that I would like answered is whether all profits from sales of Fonda are applied to paying back the $9 million. . . . or whether it instead has to be paid out of monies that would otherwise have accrued to ACL.

Just in case i'm not making myself clear, if we assume just for a moment that Fonda sales attract a 50% profit margin. . . then under the first scenario ACL would start earning its profitshare after the first $18 million of sales. . . . while under the second scenario ACL would not see any revenue until $36 million of sales had been recorded.

Thanks

BigGezza