4. Pfizer's Ibrance (palbociclib) for breast cancer ($2.76B); 3. Novartis' LCZ696 for chronic heart failure ($3.73B); 2. Regeneron Pharmaceuticals' Praluent (alirocumab) for hypercholesterolemia ($4.41B) and 1. Bristol-Myers Squibb's Opdivo (nivolumab) for melanoma ($5.68B).
third, indeed, your calculation is based on conservative assumptions. More aggressive price for the combo and substantially higher PE may result in even higher share price.
I agree with Robyn Karnauskas. VX-661 will succeed. A PE of 35 is modest when compared with Alexion, which earned only 3+ dollars in the past year. The Alexion's PE is 57 right now and its market cap is greater than the Vertex' by more than 20% where it will face a great competition from Alnylam in a few years.
In my earlier estimates (Bullish Case) I made an algebraic error and the target price came out to be ridiculously high. I corrected that below, and used very conservative values for revenues from Lumacaftor and Ivacaftor. The combo will be approved to treat homozygous F508del mutation by the FDA within a month or two, and also by the EU counterpart soon after. The net the company gets for the Lum/Iva combo pill twice daily over a year per person would be assumed conservatively to be around 180 K.
There are about 20,500 homozygous 508 mutation holders (12 years old or older) in US and major EU markets. In the Lum+Iva rollover study, greater than 90% of Phase III participants joined the trial. Uptake of this combo will be slower than the speed of adoption by 551 CFers, and let us assume that 75% of 20,500 homozygotes take the combo within 2 years of launch. You get a revenue of 20.5 K x 0.75 x 180 K = 2767.5 Mln. This figure is at the low end of revenue analysts have been predicting for the combo. Add to that the sales for the Ivacaftor mono.-responsive mutation holders 3.7 K x 180 K x 0.9 = 600 M,
assuming that Ivacaftor is taken by 90% of them and the revenue from each person is again 180 K. The annual company expenditure will not exceed 1.5 Bln, and the tax for orphan drug sales is zero. By the end of 2017 latest the gross from CF drug sales would be (2767 Mln + 600 Mln - 1500 Mln) = 1867 Bln.
Dividing this figure with the number of shares in 2017 which will be about 260 Mln, the earnings per share will be 1867Mln/260 Mln = $ 7.18 per share. After paying the 10% royalty to CF Foundation, we get a net of $ 6.46 per share. If VX-661 and second generation correctors are successful, we have to give a PE of at least 35 because heterozygous 508 CFers will be treated. So you may expect 6.46 x 35 =$ 226 /share by then.
Any one care to give an opinion as to whether the value of this year's pending approval of Ivacaftor+Lumacaftor is already baked into VRTX's PPS? Is there much of an upside after the approval?
Verty's got it right (been lurking). - most won't see the positive in this release but that's not my problem & VRTX management shouldn't care either. Remember...to a CF patient or parent...all we want is to arrest the disease; To [theoretically] stop the lung related affects of CF in its tracks. Which, for a growing # of CF-ers, is what VRTX science delivers. Trust me...if I could halt my kids lung function at 87%...I'd take it and RUN! The only other option is to watch these patients is to get sicker and sicker by the day - right before your eyes. Last part of my rant...VRTX has the corrector/potentiator market until at least 2022 and IMO, once K + Lumacaftor revenues come in, they will be active buyers.
Thomson Reuters came out with a list of the top ten most promising drugs for 2015 in terms of potential sales and the Lumacaftor and Ivacaftor combo comes in at number 5.
Well the 809 combo is a start and to keep them healthy until more and better until they splice that nasty little mutation out and put in a good gene! gGodspeed
809 won't be used for the triple because it interacts with kalydeco; that's why the 661 results are key because they have 2 that work, work well and don't interact. Vertex is the farthest ahead with another corrector/modulator (think they use modulator because it doesn't correct the same thing but makes the protein more stable, i.e., it modulates it). But there are several other companies working on things (CFF doesn't list those it doesn't fund: Calista, Galapagos, Genzyme, N30, Pfizer, proteostasis, PTC are all working to fix different issues with CFTR function. And then there is the gene therapy, etc. Vertex, though, is the best hope in the short term. Is your DS ddf508 or do you have longer to wait? Prayers for all.
Got it. Well then maybe either of the 809 or 661 combos with one of the other "modulators" in development. Nothing outside the Vertex drugs on the CF website specifically uses the word "corrector" so I'm not sure if they are potentiators or correctors, though I do see that QBW151 is listed as a potentiator. Thanks for the information. It's much appreciated.
Don't forget the more than 3000 with residual function mutations that are not included in kalydeco or 809 kalydeco label but who will be under 661 trial. Not the large hetero group but still more progress.
Hey dad, no it won't be 661 and 809... They work the same way and do the same thing and you couldn't get them both because they'll be combined with kalydeco and I'm sure once 661 is on market 809 will be pulled. But this is great because 661 doesn't interact negatively with kalydeco so the three drug combo is more likely to succeed and this will speed 661 to fda approval which is needed before getting to the three drug.
Huh, a ways off I know, but I wonder if, assuming no adverse interaction between drugs, doctors might prescribe both 809 and 661 once these two drugs are approved, assuming approval. My hope as a dad is that is what happens and there is a synergistic effect.
Some of these idiots and their posts about costs. You have no idea about costs until the first time you walk out of the pharmacy with $7,000 worth of antibiotics or you leave the hospital after a 14 day stay. Between enzymes, hypertonic saline, pulmozyme, Tobi, Vanco, and all the various machines, people have no flippin clue. Thank god for insurance, the CF foundation and Vertex.
and it starts to decline from there and there are side effects. After the treatment stops the patient goes back to zero but the side effects such as liver enzymes start to improve.
you are right, the three drug combo will not be Kalydeco + 809 + 661, but a combo of Kal + 809 + X or Kal + 661 + X. Most likely it will be the 661 containing cocktail. X - referred to as second generation corrector -had been promised to be in the clinic by late 2014, but that has been postponed to sometime in 2015. I guess VRTX wants to see more results on 661 before making the final selection of X.