Royalties are paid to Cellmid as a specified percentage of PEB...

Royalties are paid to Cellmid as a specified percentage of PEB operating revenue. The RM Research Report of February 2014 gave an example of what returns CDY might expect if penetration of the US market were to require five years to build. A relevant extract from the Report is included below.

The analyst’s valuation method was based on assumptions of 4% royalty rate and the capture of 9% of the US market. The expectation then was for annual royalties to CDY to reach $5.6M by 2022 assuming a CxBladder unit test price of ca $717. The bureaucratic delays experienced likely now will require the timing estimate to be altered.

Because no costs are involved with royalty payments amounts received contribute directly to pre-tax earnings, of obvious value once a biotech P/E of ca 30 can be applied.