The 'your' was intended to refer to the hypothetical person who was blinded by love for the company, not you specifically - you seem like a generally reasonable person to me, even if I don't agree with your choice of stock. More power to your elbow!
You make a fair point about the milestone payments making the economics non-identical for MSB and Teva. However in mitigation, that $1.7bn number is a maximum number, no doubt based upon stretch targets like 'acquiring a share of 50% in the CHF market' and similar. Gaining regulatory approval in the US would likely trigger a non trivial payment for instance. Maybe even of the order of usd100-150m! However it is vanishingly unlikely that anyone would sign a development agreement that by dint of milestone payments would make a blockbuster drug unprofitable.
As for these 40% royalties, I think you might be thinking of the transfer pricing hypothetically payable to MSB for the manufacture of the treatment, which from my understanding was related to volumes, and from which costs of manufacture had to be funded. This is hard to talk about reasonably given the paucity of information available. But clearly this may also make the valur to Teva different than to MSB.
However, even after adjusting for this, if the value to Teva was less than zero, the value to MSB is unlikely to be much more, because any potential payments need to be adjusted for the probability of trial success, a probability which is lower than a week ago because Teva have walked, and have potentially walked because they saw weak interim data.
I've seen numbers from analysts estimating a 25%-50% chance of success for the CHF trial before teva walked - that's clearly lower now.
Not only that, but whilst whilst we spend the next two years discussing the finer points of Bayesian inference, MSB will be knocking out stock hand over fist as part of their death spiral facility. So good luck!
MSB Price at posting:
$1.14 Sentiment: Sell Disclosure: Held
(20min delay)