Sofdra - Post approval royalties, costs and earnings

Good afternoon,

With only a couple months until D day, I've been quietly catching myself up on where the last 2 years has gone with Botanix.

I noticed on acquisition of Sofdra, Bot was liable for royalties up to 20%. It looks like they bought out the royalties in 2022 from the intermediary, leaving only a 5% royalty payable on new sales to the laboratory.

First - is this correct and is this the only royalty they are now liable for?


Second, I noted mentioning of ballpark pricing based on currently re-imbursed products. The quoted reimbursement was $680USD per month and that BOT were aware of the limit most payers were willing to reimburse, and that the price should be a premium above other products because of the better safety and efficacy.... so somewhere north of $680.

In Japan this same product is selling for about $70USD depending on the exchange rate at the time ( It was closer to 90 USD before that ), but I am not aware for the JDM pharma, do they recieve additional assistance in the manufacturing, or is $70 USD for them able to completely cover the cost of manufacture to sales, royalties, with profits included?

If that is the case, then I would see no reason BOT are not able to have similar costs from manufacture to product sales of under $70, which then points towards quite massive product margins.

Take $680 per unit, minus 5% royalty, minus $70 cost leaves $576USD profit per unit.
12 units per year - $6,912 per year per patient profit

With equivalent patient numbers Kaken manged in year 2023 ( around 15,000 )
103 million USD profit, on less than 1 % market penetration.
With a PE of 20, that would equate to about 9.3 times the current share price, or $2 Aud per share

Every 1% market penetration in the USA is 254 million USD.
Botanix stated US marked includes 3.7 million people who are seeking treatment.
If we assume 1% market penetration , 254 million USD is 389 million AUD.
20:1 PE is 7.78 Billion Aud = share price 23x today, or $ 4.95

I notice some analysts used a 5% market penetration over an 8 year period.
5% = 5 x 389 AUD in profit = 1.945 Billion AUD
PE 20:1 gives 38.9 Billion AUD, and SP 115 x today, or $24.7 AUD Share price

Does this sound about right?
Blaze away.....