2 ms·

> A quick Google search shows that they paid $11 billion for the company that sells the drug(Sovaldi), and earned $1.3 billion off of it[1] in 2016 Well, we ar

> A quick Google search shows that they paid $11 billion for the company that sells the drug(Sovaldi), and earned $1.3 billion off of it[1] in 2016 Well, we are only 1 quarter into 2016, and you are only looking at Sovaldi (when sofosbuvir is also a component of Harvoni)? Q1 2016 is: - $1.3B in sales of Sovaldi - $3.0B in sales of Harvoni So, that's $4.3B in sales in Q1, a poor man's approximation of multiplying by 4 is $17.2B in sales for 2016 at a gross margin of 87.2%. The profit on drugs that include sofosbuvir as a component in 2016 will probably be over the $11B purchase price.

MichaelBurge 10y ago
I probably misread it then. That starts to get into the realm of being unambiguously unfair. At the very least, they probably should've paid more money for it so that the people who developed the drug could've gotten their share. Maybe it was just a risky purchase that turned out unexpectedly successful. I've never evaluated a $10+ billion deal, but I imagine I'd be scared of it falling through if I asked for too much.