Summer Street Note "we reiterate our BUY rating and price target of $11"
Avanir Pharmaceuticals (AVNR)
Gross Nuedexta Sales for FY4Q12 are $15.4MM
November 28, 2012
AVNR reported preliminary Q4 gross revenue for Nuedexta of $15.4MM, up 26%
Q/Q. In the past, the gross to net has been in the teens. Going forward ANVR has
predicted the gross to net will be between 20-25%. We had net sales of $11.4MM
in our model. We expect the FYQ4 earnings call to take place in mid-December.
AVNR has begun the phase 1 trial of AVP-786 (deuterated dextromethorphan),
which could yield results in calendar 1Q13. We are not adjusting our model at this
time and are comfortable with our estimate of Nuedexta revenue of $72.8MM in
FY 2013, which includes $69.1MM in the US and $3.7MM in the EU.
Total R&D and SGA spending was between $21.7MM-$22.2MM excluding non-cash
items. There were more than 11,000 total prescriptions for the month of October
2012. AVNR used $12MM cash in FY4Q12, and has $72.1MM as of September 30,
2012. AVNR announced that it has initiated the first-in-human phase 1 clinical trial
of AVP-786 (deuterated dextromethorphan). The trial is designed to #$%$ the
single and multiple dose pharmacokinetics, safety and tolerability of AVP-786 in
healthy subjects. Approximately 40 subjects will be enrolled in this randomized
crossover study to compare multiple dose levels of AVP-786 (alone and in
combination with quinidine) with dextromethorphan/quinidine. Results are
expected in 1Q13.
Gross Nuedexta sales of $15.4MM are $4MM higher than our estimate of net
$11.4MM estimate and higher than the consensus of ~$12.7M. Nuedexta
prescriptions continue to rise. We remain optimistic about our Nuedexta
estimates and the prospects for AVNR.
We are not making any changes to our models and we reiterate our BUY
rating and price target of $11. Our price target of $11 is based on a 25x
multiple of our FY15 EPS of $0.63/share, discounted at 20%.