The US government award sales contracts for 750m to 3B USD, payed over 10 years or until patent expiry. So say 75m-300m per annum.
In return, Medicare and Medicaid get unlimited supply of the drug.
A company may win a contract while still in the R&D phase (going through trials), but doesn't start getting paid until the product is approved by the FDA. The benefit is that the company will have investors climbing over each other to take part in funding rounds given the known immediate potential payoff (no slow sales curve, no fear of product sitting in reserve for special cases).
A company like Recce could win multiple contracts given it has multiple drugs in development.
Anyone else been doing any reading?
Come on guys, surely this is more interesting than discussing the +1%, -1% SP moves!
RCE Price at posting:
96.0¢ Sentiment: Buy Disclosure: Held
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