Commercial-Model SG&A Benchmark

The rNPV pro-forma computes operating cash flows as:

SG&A% is the share of net revenue consumed by selling, marketing, and general & administrative expense at steady state. The wizard now seeds sga_pct from the per-commercial-model prior in Section 3.

COGS disclosure. COGS% is the other half of operating margin and is benchmarked separately, keyed on modality rather than commercial model (see the Modality COGS Benchmark section). The SG&A prior here implies no value for COGS%; set both inputs deliberately. COGS is out of scope for this section.

This is the load-bearing point a CMO will test first: SG&A% is a function of the commercial model, not the drug modality. The drivers, salesforce size, prescriber breadth, direct-to-consumer (DTC) advertising, and patient-services intensity, are properties of how the asset is sold, not what it is made of.

All values as of M2, computed from FY2024 public filings (companies do not report SG&A-as-%-of-revenue directly; ratios are derived from the raw figures). Override per asset with asset-specific commercial assumptions.

Table 1. Per-commercial-model SG&A benchmark. Central = representative steady-state SG&A% for a single mature asset in that model. Band reflects the defensible range across launch intensity and franchise scale. Comparables are FY2024 corporate ratios computed from raw filings (net product revenue where available; Pfizer/GSK use total revenue). Steady-state economics; does not reflect launch-year inflation. Source: SG&A benchmark research file, 2026-05-21.

1. Orphan is the HIGH tier, not the low one. A single rare-disease asset has a small revenue denominator and carries dedicated commercial infrastructure: market-access teams, patient-services hubs, field reach to a thin prescriber population. That pushes SG&A% above broad-market, not below. A single launching orphan asset should auto-fill a higher SG&A% than a primary-care brand, by design, and defensible.
2. Specialty ≈ primary care (~25%). The data does not support a meaningful central-value gap between these two. Primary care carries the highest absolute SG&A spend (large salesforce, DTC), but spread over a broad revenue base the ratio lands close to specialty. This section states the near-equality rather than fabricating precision. The real differentiation is orphan vs broad.
3. Vertex 13.2% is a low-end outlier, not the orphan central. An entrenched single-franchise (cystic fibrosis) at an ~$11B revenue base spreads fixed commercial cost thin. It demonstrates the floor a mature, scaled orphan franchise can reach; it is not representative of a single launching orphan asset. It is shown as a stated low-end exception below the band, not as the band central.

Each value is a steady-state, mature-product ratio. Early-commercial SG&A% is inflated: fixed launch infrastructure divided by a tiny early-revenue denominator can exceed 100% of net revenue in the first year or two of a launch. The bands above are mature ratios appropriate for the peak-year economics an rNPV models. A valuation that needs to capture the launch ramp explicitly should model a higher SG&A% in the early commercial years and let it converge to the tier central at peak.

These values are a starting prior for use when asset-specific commercial assumptions are not yet known. They are corporate-blended ratios spread over portfolios; a single launched asset carries less shared-G&A amortization but more dedicated launch cost, so the tier central is a reasonable steady-state proxy, stated as such, not as a per-asset estimate. A reviewer will immediately ask:

• “Is this steady-state or launch-year? Early-commercial SG&A% is far higher than the steady-state default.”
• “Why is orphan the high tier?” (Small denominator + dedicated rare-disease infrastructure, disclosed in Section 4.)
• “Why no gap between specialty and primary care?” (The data does not support one; the real split is orphan vs broad.)
• “Net or total revenue in the denominator?” (Net product revenue where available; Pfizer and GSK comparables use total revenue, flagged in the table caption.)

• Asset-specific vs firm-level, and the acquirer adjustment. SG&A splits in two: selling & marketing (salesforce, market access, DTC, patient services) is effectively asset-specific, it is deployed for a product and is the part that varies by commercial model, which is what these tiers key on. General & administrative (corporate HQ, finance, legal) is firm-level overhead shared across the portfolio. These comparables are firm-level corporate ratios used as the proxy, which is correct for the standalone single-asset framing, valuing a one-product company where the asset bears its full SG&A including its own G&A. For an acquirer absorbing the asset, incremental SG&A is lower (the acquirer’s G&A infrastructure already exists, a synergy), so the corporate ratio is conservative and overstates the asset’s marginal SG&A; adjust down for an acquisition case, the same standalone-vs-acquirer adjustment the Tax benchmark makes.
• Net vs total revenue denominator. Ratios are computed from headline figures. Net-product-revenue denominators are confirmed for BioMarin, Vertex, and Incyte; the Pfizer and GSK comparables use total revenue, which understates the SG&A% slightly relative to a net-product-revenue basis. The bands absorb this.
• Launch intensity varies within a tier. The specialty band is the widest (20–34%) precisely because launch-stage specialty companies (e.g. Jazz at 34%) sit far above scaled ones (Exelixis at 25%). Pick a point inside the band that matches the asset’s commercial maturity.
• Steady-state assumption. All values model mature steady-state commercial operations. Early-commercial SG&A% is materially higher and can exceed 100% of net revenue in the first launch years from fixed infrastructure over a tiny revenue base.