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  4. Innovation Pharmaceuticals Inc (IPIX) Message Board

Pete, $8 billion is what I would consider a mega b

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Post# of 72446
(Total Views: 489)
Posted On: 07/08/2018 8:29:31 PM
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Posted By: Squar
Re: petemantx #47238
Pete, $8 billion is what I would consider a mega buyout for a post-phase 2B Prurisol IPIX. It would be among the largest pre-phase 3 deals ever done.

I'm sure you have seen the link posted on the other site by PlentyParanoid:

http://www.pharmadeals.net/journal/pharmadeal...t/pdf/2228

What are you basing your buyout numbers on? I am having a hard time finding more than a couple examples of a pre-phase 3 company being purchased for more than $8 billion.

If one takes a hypothetical drug worth $50B less taxes on revenue it becomes $40B. Now, about five things have to occur to get to that point from where Prurisol is after phase 2B:

1) Approved and succeeds in at least one phase 3. (2 years from here)
2) NDA filed and approved by FDA. (1 year from submission)
3) Market the drug and ramp revenue. (3-5 years to ramp to numbers that will get us to $50B)
4) Hope a better competitor doesn't come along in those 17 years.
5) Hope there is no radical change in government or taxes in those 17 years.

What percentage do you think a BP pays out for revenues that won't start for at least two years which run to almost 2040? The United States has massive political risks. One president institutes near Universal Healthcare, the next slashes corporate taxes in half. What happens when Bernie Sanders 2.0 wins in a cycle or two and pharma is back on the price control block? In a buyout they assume all the risks, all the costs, and pay all the money up front.

A great partnership would be $50M upfront + $1B in milestones + 15-20% of revenues which would be about $8B, most of which gets paid as it comes in. In a buyout it's all upfront - massively more risky. Pharma is not in the business of taking risks any more. They are simply hedge funds now.

Kelt - $8B is pennies on the dollar? What do you value IPIX at in 2018 if Prurisol comes in at 40% PASI75?


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