Re: Insmed milestone payments to AstraZeneca for INS007
At the risk of sounding like I am working for WL, I thought I would just think out loud here:
I unabashedly think that Insmed raising funds through the recent stock offering was both needed and brilliant (dilution be darned.......LOL).
A lot of people think that Insmed had the funds to get Arikayce to market and furthering it with cash to spare. Maybe, maybe not. But, with the information at the GS conference and the subsequent reminding us all about the AstraZeneca License Agreement, it occurs to me that they did not.
Let me see if I understand this:
INSM already paid AZ $30 million. At some point in the future, soon I think, INSM will be on the hook for more funds.....$85 million for clinical development to develop a compound.....then if they develop a second compound they will owe half the 85 more....or $43 million more. If my arithmetic is correct, that's $128 million......PLUS if all goes well, then they will pay royalties ranging from approximately 8%--16% on net sales of any approved product......AND THEN, oh my, let's hope this comes to fruition.........they will need to pay $35 million upon the first achievement of $1 billion in annual sales (or 3 1/2%....do I have that right??)
AND THEN, AZ will have the option to negotiate a future agreement to commercialize the compound in COPD or asthma.
If I am dreaming, please DON'T pinch me.
Pianoman, please record an arrangement of I LOVE A PIANO....and title it I LOVE A PARTNERSHIP