Modality COGS Benchmark

The rNPV pro-forma computes operating cash flows as:

Before this disclosure the default cogs_pct was 0 — modality-blind, which silently overstated rNPV for biologics and cell/gene therapies where manufacturing cost is material. The wizard now seeds cogs_pct from the per-modality prior in Section 3.

SG&A disclosure. SG&A defaults to 0 in the wizard and is user-supplied; the COGS prior implies no SG&A value. Set SG&A explicitly for a complete operating margin. Typical mature-product SG&A ranges 20–35% of net revenue for specialty pharmaceutical products; SG&A is out of scope for this section.

Each value is a constructed, disclosed ratio:

Why not a 10-K gross margin?

1. 10-Ks report blended portfolio margins, not per-asset COGS. A large-cap’s “cost of sales ÷ revenue” mixes dozens of products across modalities with royalties, inventory step-ups, write-offs, and idle-capacity absorption. It is not the COGS% of any single asset. (Merck FY2024 gross margin 76.3% is a company number across the whole portfolio.)
2. Pre-profit cell/gene companies show launch-distorted COGS. A newly-launched autologous or AAV product running a half-empty suite reports COGS at 60–90% of net sales purely from under-absorbed fixed cost and low-yield early batches — a capacity-utilization artifact. These values deliberately model steady-state manufacturing (mature yields, loaded suite).

The antibody nuance. Naively dividing bulk drug-substance cost per gram by net price per gram gives every biologic a ~1–3% COGS floor, because marketed mAbs sell for roughly $8,000–12,000/g while drug-substance costs $50–150/g. That floor is real but misleading: it omits fill-finish, QC/release, stability, yield loss, cold-chain, royalties, and reserves/returns — items that dominate biologic product COGS. The central values below are anchored to fully-burdened product economics and cross-checked against mature blended-product gross margins.

All values as of methodology@2026-05-20. Both the manufacturing cost anchor and the reference net price are disclosed; the arithmetic is explicit. Override per asset with asset-specific cost and price.

Table 1. Per-modality COGS benchmark. Central = constructed ratio (manufacturing cost anchor ÷ reference net price; both disclosed per row). Band reflects defensible range under reasonable variation in cost assumptions and price point. ★ Gene therapy central (13%) is re-centered — see Section 5. Peptide and bispecific cost figures carry lower confidence (see Limitations). Steady-state economics; does not reflect launch-year under-absorption. Source: modality COGS research file, 2026-05-20.

This is the most important single fact about this benchmark. Across the table, manufacturing cost per course varies by roughly 4 orders of magnitude (cents to $100k); net price per course varies by roughly 5 orders (dollars to $3.5M). Most of the cross-modality COGS% spread comes from the denominator, not the numerator.

Two concrete illustrations:

Implication for modelling. The correct approach for a specific asset is to anchor to the manufacturing cost for that modality and derive COGS% from the asset’s own projected net price — not to take the central as a fixed input. The defaults here are a starting prior for assets where cost/price is not yet known; replace them when you know either figure.

Gene therapy has a bimodal COGS% distribution because price spans more than 4× across today’s approved products ($850k–$3.5M per course) while manufacturing cost per dose spans only ~10× ($10k–$100k/dose):

The band 2–25% is genuinely bimodal, not a continuous distribution. Reporting one central is an acknowledged simplification.

The auto-fill default (13%) is deliberately re-centered from the price-weighted central (~8%, which weights toward the marquee ultra-priced products) to a mid-reference price (~$600k) to avoid understating COGS for a typically-priced gene therapy.

These values are a starting prior for use when asset-specific manufacturing cost and net price are not yet known. They are not an estimate of, or a substitute for, asset-specific cost accounting. A CMO reviewing a valuation built on these defaults will immediately ask:

• “Is this steady-state or launch-year? For an autologous CAR-T or first-year AAV product, launch COGS% is far higher than the steady-state default (60–90% from under-absorbed suites and low-yield batches).”
• “Your mAb 18%: does that include royalties? Royalties alone can be 5–15 points.” (Disclosed in band; royalties sit inside 12–25%.)
• “Your bispecific cost premium 1.3–2×: source?” (Derived from published yield data, not a per-gram COGS figure — acknowledged as lowest-confidence entry.)
• “Net or list price in the denominator?” (Reference net price stated per row. For CGT, list ≈ net; for small molecule/mAb, true net can be materially below list.)

• Bispecific cost premium (lowest confidence). The 1.3–2× mAb premium is derived from published yield data (12.5% theoretical heterodimer ceiling; 60–75% observed downstream yield), not from a published per-gram bispecific COGS figure. No clean peer-reviewed $/g bispecific number was located. Treated as derived/assumed.
• Peptide $/g at commercial GMP scale (lower confidence). Anchored to a CDMO/industry ~$100/g figure scaled for peptide length; few peer-reviewed per-gram commercial-scale numbers exist. Partly assumed.
• Fully-burdened central for every modality. The step from drug-substance cost to fully-burdened product COGS uses industry burden ratios cross-checked against blended gross margins, not asset-level cost accounting. Defensible as a prior; not an audited figure.
• Net vs list price. Reference prices are stated as net where data is available. For CGT, list and net are approximately equal (outcomes-based structures rather than volume rebates). For small molecule and mAb, true net is typically below list — raising COGS% above the central. The bands absorb a reasonable net-vs-list spread.
• Steady-state assumption. All values model steady-state mature manufacturing. Launch-year COGS% for autologous cell therapy or AAV gene therapy is materially higher (60–90%) from under-absorbed suites and low first-batch yields.

01Lopes AG, Ghassemi S, Bracewell DG, Farid SS (2019). The long road to affordability: a cost of goods analysis for an autologous CAR-T process. ResearchGate 330623902. (COGS $95,780/dose.)

02Pollock J, Coffman J, Ho SV, Farid SS (2017). Integrated continuous bioprocessing: Economic, operational, and environmental feasibility for clinical and commercial antibody manufacture. PubMed 28480535 / PMC5575510.

03Cost and supply considerations for antibody therapeutics (2025). Tandfonline 10.1080/19420862.2025.2451789; PubMed 39829035. (mAb COGS ~$50–100/g stagnation.)

04BioProcess International — Improving Gene Therapy Viral Vector Manufacturing Economics: Modelling Bioprocess Costs. (200 L batch ≈ $2M; ~$10k/dose at 200 doses.)

05Batavia Biosciences — Driving Down COGS. (Sarepta DMD 8×10¹⁵ vg dose up to $100k/dose; $10k/dose aspirational.)

06BioProcess International — Development and Manufacture of Therapeutic Bispecific Antibodies. (12.5% theoretical heterodimer yield; Merus zenocutuzumab 60–75% downstream yield at 2,000 L.)

07ASCO Educational Book — High Cost of Chimeric Antigen Receptor T-Cells (EDBK_397912). ($48k–106k/dose; $350k–450k patient cost.)

08BioPharma Services — Antibody Drug Conjugates aren't 'too expensive'… (Drug-linker raw material $200–2,000/g; 200 kg/yr campaign math.)

09bioprocesstools.com — Pharmaceutical COGS: Drug Product Cost of Goods Calculation. (DS $50–200/g; DP $30–80/100mg vial; large-pharma COGS 25–30% of net sales; biosimilar 50–65%.)

10GEN (Genetic Engineering & Biotechnology News) — Reducing the Cost of Peptide Synthesis / Peptides: New Processes, Lower Costs. (~$100/g manufacture; purification dominance.)

11PrimeGen Labs — Peptide Pricing Factors. (Raw materials 30–40%; labor/OH 25–35%; QC 15–20%; 15–25% cost increase per aa beyond 30 residues; SPPS practical to 50–70 aa.)

12Hernandez et al. — mAb pricing transparency literature; Georgetown GHPP. (Marketed mAbs ~$8,000–12,000/g finished antibody; trastuzumab $10,386/g, rituximab $9,400/g, bevacizumab $7,970/g.)

13Drug net prices (2024–2026): Zolgensma $2.1M (Novartis 2019); Hemgenix ~$3.5M (CSL Behring 2022); Luxturna $850k bilateral (Spark 2018); Yescarta ~$424k; Kymriah ~$475k (LBCL); Enhertu ~$3,174/100mg; Kadcyla ~$3,709/100mg (Drugs.com 2024); Wegovy ~$1,349/mo; Ozempic ~$1,028/pen (GoodRx); Imbruvica WAC ~$10,200–22,700/package; Revlimid ~$26,296/28-cap.

14Merck & Co. FY2024 Form 10-K (gross margin 76.3%). SEC EDGAR. (Blended portfolio corroboration only.)