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Biotech Stock Mailbag: Genta Takes Another Stab


Speaking of Antigenics, Stan M. takes issue with my valuation metrics for the company's vaccine adjuvant candidate Q21.

"Your low-ball estimates for Antigenics royalty income from QS21 are ridiculous, especially when the company has already told us that it expects $500 million in peak royalty revenue," writes Stan, adding. "Get a life!"

Sorry, that's wrong. What Antigenics' CFO Shalini Sharp said Wednesday was that $500 million in royalty revenue represented the total market potential if all QS21-containing vaccines garnered 100% market share in malaria, flu, cancer etc.

She did not say that Antigenics expects to receive $500 million in royalty revenue from QS21.

Think about it this way: If Antigenics received a 3.5% royalty (low-single digits) on sales of all QS21-containing vaccines, it would take more than $14 billion in vaccine sales to kick back $500 million in royalty revenue.

You believe Antigenics' partners are working on $14 billion worth of peak vaccine sales? Really?


Lastly, I remember Bill Meehan on this day.

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.
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