My gut feeling says the probability is 95%. It comes from Ph II data of 809+770 and 661+770. Because 809 and 661 target the same location on CFTR molecule and the action mechanism is the same, the efficacy of one molecule reinforces the efficacy of the other. This improves the probability of success of both.
What did you think of his probability of approval at greater than 90%? An analyst I follow rate the approval percentage at 65%. The analyst could be just being conservative....
Check it out guys you have the MEGA opportunity to buy this significantly underpriced stock at the bottom if you want to make money !
AEZS has already a Drug on the Market which is partnered with pharma giant Merck (MRK) , this Product brings around $70 M in annual revenue to AEZS thats almost two times higher than current Market Cap .
AEZS has another Drug awaiting FDA approval and muliple Cancer Drugs in Late Stage some of them have potential Blockbusters .
I think AEZS has the potential for a runup to minimum to $4-5 before FDA decision in Mid 2014 . GL
AEterna Zentaris (AEZS)
Market Cap: $43 M
Cash: $25 M
Shares Out: 32 M
Annual Revenue :$ 70 M
BIG PIPELINE :
Macimorelin Acetate (AEZS-130)
Diagnostic in adult growth hormonedeficiency (endocrinology) Awaiting FDA approval
Product ..Zoptarelin Doxorubicin (AEZS-108)
Endometrial cancer in Phase 3
Tripl-negative breast cancer In Phase 2
Castration-and taxane-resistant prostate cancer in Phase 2
Refractory bladder cancer in Phase 2
Ovarian cancer (completed) in Phase 2
Product ..Ozarelix :
Prostate cancer in Phase 2
Product ..Macimorelin Acetate (AEZS-130)
Therapeutic in cancer cachexia in Phase 2
Multiple cancers in Phase 2
Yes, good discussion John.
"American/Japanese/European's are paying the R&D"
You are absolutely correct . Keeping in mind that not many american pharma companies spend a lot of their own resources in developing drugs that have applications only in 3rd world countries. Most such drug developments are either subsidized by the UN or some philanthropic organizations such as Gates foundations.
As far as India is specifically concerned, they will be serviced by China before transitioning. I would even go as far as to say China will be a significant threat to Europe here in a bout 10 years on account of some railroad projects in Russia and China's leadership in using high speed rail to compete with air package delivery.
You are right about the drug company having two choices. Which just validates my point... American's/Japanese/Europeans are subsidizing foreign healthcare because without the American/Japanese/European money, the foreign market would not exist... American/Japanese/European's are paying the R&D.
I like the discussion.
I would have to say it is not that simple. When making a decision to move production operations, you have to consider your supply chain, human resources, infrastructure, security of intellectual property, and capital expenses.
For example, when Intel (also not an employee) decided to build some factories in Vietnam, they had to import people, build roads, improve ports, and import in specialized moving equipment to safely transfer the extremely sensitive equipment. The equipment had to be thier prior to the production equipment being shipped... so your lead time is 6 months + 6 months + 12 months + 3 years = 5 years just to open the doors... and by that time, where is the market?
It is a complicated (physically and legally (trade laws, inco terms, geo-political) etc) to even consider spending the capital expenditure to build out foreign production capacity.
While I agree that India's rate is lower ($0.91), the complete lack of infrastructure makes any significant production capability their way too expensive. The infrastructure is so bad there are many parts in India where the only stable transportation services for goods and equipment is on trailers pulled by four wheelers (not kidding). This is why there is a large movement now to move production capabilities domestically (and Mexico).
As far as catching up, I stated 2 to 3 business cycles (16 to 33 years). This is not a long time off... I suggest looking at some of the UN reports for more information.
I understand what you are saying about the inequality of pricing and about labor costs in other countries going up. However, all of that is happening gradually and it will take some time for even China and India's standard of living to catch up to the United States' standards. Until it does price disparities of American drugs are given.
Right now a typical Indian's salary is way below its counterpart in US. So an American drug company has 2 choices; 1) sell its drug at prices that the Indian can afford and make a little profit, or 2) demand American prices and sell no drug and make no profit.
Exactly. So US Citizens pay a 95% margin and the rest of the world pays a 10% margin so the company nets 30%. Not actual figures of any company but shows the principle.
That is not sound business decision making... it is price gouging the wealthy... or even using those that pay to subsidize health care to those that cannot. With the advent of a health care system that will result in a single payer system if it works... I find no basis of equality why the American tax payer should fund affordable healthcare for the whole world. Especially in light of imminent wage parity which I will discuss.
The problem I have with that is that the majority of manufacturing base companies will have labor cost parity with the US in the next five years. I have worked with Boeing (I am not an employee) on developing forecast models for their supply chain, and off memory, specifically the top 8 countries for the 787 will have price parity in three years.
I could go on. But I won't for the sake of forum. Point is, within the next 2 to 3 business cycles, advances in ubiquitous hardware technologies used in manufacturing will make the more pressing issues control of input resources and proximity to end user on account of total landed cost.
In layman's terms, it will cost cheaper the less you have to ship it because the cost of labor will be the same.
Also during this time, we will see the rise of the new global middle class, predominately in India and China.
So explain to me again why it is still okay to charge the US more? And if my statements are not credible enough, simply go to the Bureau of Labor and Statistics and research manufacturing labor data.
This has all been brought to you by 'free trade'. The changes in structural employment and socio economic stratification have more to do with an equalization that is occurring amongst the industrialized countries... the only place cheap left is Africa. (Vietnam is about done) My opinion is why waste the capex.
these companies employ a ton of people here in the US. Have to keep the cycle of innovation going. The failure rate in small/mid cap biotech is extremely high. Drug pricing issue is complex and deserves a look beyond just the PRICE.
[The question is, "Why do you see fit in your business model to use the excessive profits made on the American consumer / tax payer to subsidize foreign business. "]
I am assuming you are referring to lower drug pricing in foreign countries. I think it has to do with sound business decision making. Companies usually price their products to maximize sales as long as those sales are still profitable. They have to balance the price with the local consumers ability to pay. For example, there will probably be very little sales of some of the orphan drugs in third world countries if they had to pay American prices. In addition, drug companies usually would like to balance their profit making with the humanitarian needs of those less fortunate than us in order to create good will and good publicity for their companies.
Just a cursory glance shows max pain at $61.00.
IF you are entering a long position because the chart is looking like a bottom, be aware of this.
I wouldn't peg any weight to technical analysis (market psychology) until after next Tuesday / Wednesday.
It may take many years but the Exon-skipping technology looks very promising. Sarepta will do well with DMD and others in the future. Question is: does SRPT have enough cash to sustain research and development?
Would U be short $VRTX at these levels. 809 study is very overpowered, it won't have trouble getting p-value significance. Don't compare $vrtx with $srpt. $srpt is years away from treating a small % of DMD subjects and there is now concern of its mechanism of action given the recent failure of $rna. $vrtx is a few months away from capturing about 1/2 of all CF mkt. It's data has been strong. Heck it has a back up in 661. Show me the competition for vrtx in CF???
Sentiment: Strong Buy
Is VRTX next? I am nervous and what if VX 809 doesn't meet FEV1 p value? If VRTX plunges 60%, we are looking at 6 B market cap which sound right. Insiders keep cashing out and option rain of gold never stops for them. Guy who is hopeful that VRTX has a chance into all oral market, himself cashed out $86 a piece.
I feel so dumb after losing SRPT. Margin call coming. I will seek addiction counseling.
And healthcare is not the only culprit that engages in this practice... the one that irks me the most is the college textbook market... which is why it is nice now that students can buy "international" versions on line.
And you also indirectly show a point I have yet to hear from any executive I have spoke with... a question they almost choke over.
The question is, "Why do you see fit in your business model to use the excessive profits made on the American consumer / tax payer to subsidize foreign business. "
At $300 and 1/3 of the projected g2/g3 market it is roughly 14 billion. If Gilead just wanted to triple their return (which is reasonable in my opinion) they could pop these out for $1,000 USD a piece. 3 to 5 years and this has run its course... and I think in about 3.
And I have yet (this is a solicitation for ideas) to find a valid reason why this wont be prescribed off label, for a longer treatment duration.
So the relevant point is, those that are more than 2 years behind are never even going to make it to market. Vertex is at least a year behind.
The potential future value is in CF.
I wrote before I thought to much... your points are absolutely right.
On the price war comment though... Merck attempted to undercut Vertex through the VA and by pricing... they failed and Vertex responded by raising their price.