Description

Inamed has licensed the human collagen business from Advanced Tissue Sciences. As per Exhibit E of the disclosure statement, it is assumed that royalty payments to ATISZ are as follows:

($mlns) 2003 2004 2005
Revenues 8 20 30
Royalty (%) 7% 7% 7.5%
Royalty $ 0.56 $1.40 $2.25
Back end $4.50


Based on Inamed's Q2 conference call, the facial products division did $22mln in revenues for the Quarter. Cosmoderm / Cosmoplast accounted for a little more than 1/3rd of the revenues. Based on this number and guidance provided by some of Inamed's analysts, we are assuming the following:
Inamed's aesthetic revenues and % of revenue attributed to the Cosmo products are assumed to be $63.5mln and 50% respectively for the last 3Qs of 2003, $82mln and 60% for 2004 as well as 2005.
The backend (beyond 2005) assumes $40, $45, $50, $55 and $60 for Cosmoderm /plast revenues for '06 '07 '08 '09 '10 respectively using 7.5% royalty stream and using a 10% discount rate.

Estimates
($mlns) 2003 2004 2005
Revenues $63.50 $82.00 $82.00
Cosmoderm /plast portion $31.75 $49.20 $49.20
Royalty (%) 7.5% 7.5% 7.5%
Royalty $ $2.38 $3.69 $3.69
Back end $13.61

Discount
($mlns) 15%
yr royalty pv
'06 3 2.61
'07 3.375 2.55
'08 3.75 2.47
'09 4.125 2.36
'10 4.5 2.24
18.75 12.22
pv/shr $0.169

Plan Estimates
Total distributions
Initial - paid 6/16/03 $0.065 $0.065
Segenix, Cardiovascular & Cash $0.145 $0.145
Human Collagen Royalty $0.120 $0.320
Total $0.330 $0.530

May 31, 2004 distribution:
According to Exhibit E, it was assumed that a $.10 distribution ($7.3mln) would be made initially with annual distributions thereafter from available cash. The initial distribution did not include the assumed asset sales of Segenix and the Cardiovascular business. Therefore assuming you add $4mln from the sale of these two assets plus
roughly $4mln in cash as per the June 30, 2003 Quarterly report plus and additional $2.8mln from "extra" Inamed royalties less $.500 in trustee fees you are left with $10.3mln ($.14/shr) to distribute to shareholders in May 2004.

Sorry for being so breif; however, I know this one like the back of my hand, if you have any questions feel free to ask.

Catalyst

Future royalty and liquidation proceeds