Risk reward for buyer
Reward
Combine 7 years sales (monopoly guaranteed by Orphan drug status) X 3,5 billion = 24.5 Billions
Risk to assume
TLN has no debt
Clinical risks and investment to be done about 130 million
Purchasing TLN 70 millon
= 200 millions
That's a 1 for 100 ROI (ruff numbers)
Alternative investments
If you go out and develop a new drug it will cost you 400-500 millions from stracth
If you have a PII compound there is about 200-300 left to burn
For the same price, 200 millions, you get 3 drugs, 3 chances of recuperating invesment and making profit assuming that one of 3 is approved.
Pretty good perspective for buyer.