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# Cadence Pharmaceuticals, AŞ Message Board

• dragan7777777777 dragan7777777777 Jan 23, 2011 9:31 AM Flag

## How much-1???....

Interesting questions. How many units of Ofirmev CADX can sell in a year, or what is the potential market? Or, how much money they can generate in 1st, 2nd, and so on, year?

This is very difficult to answer. Too many variables, too many potential patients in elective, or emergency surgery, and aside of peri-operative time ( ORs, recovery room, surgical floors ), one has to take in account non-surgical patients, plus ER, ICU, NICU, labour/delivery floor, and fever indications. Let me try to crunch some numbers. Let me try to make impossible prediction to a "possible" speculation.

Let's look ONLY at elective surgery. To do this math one has to establish some basic assumptions. Those assumptions could be incorrect, subjective, or "reading tea leaves".
But, I will do my best to be reasonable, logical, and objective as much as I could. I am sure my math will generate many comments, and I would love to see some other assumptions, or different numbers based on reasonable facts, not bashing.

Let's see what is Ofirmev potential for elective surgery. Here we are:

CADX has 150 reps. Each rep salary is around +200K per year ( this is top-notch pay in the industry ). CADX cost per rep is higher, if you take in account all expenses, like cars, local, and district manager salaries, and so on. Each rep will be highly motivated to do his/her best, and each rep knows there is a line behind of other reps who would love to get in, and prove they can do better job.

Let's assume CADX will place Ofirmev on Formulary List in 500 hospitals in first year. This looks to me very reasonable, and achievable, it is only 50% of targeted hospitals. Average hospital has 10 ORs. Let's assume, CADX will place Ofirmev for all patients in 5 ORs, this is also 50% of potential. Each OR would have in average 4 patients for elective surgery per working day. Each patient would have two days or Ofirmev therapy, one day on surgery day ( OR, recovery room ), and one day post op, on the "floor". Ofirmev is given IV Q4-6H, meaning every 4 to 6 hours. So each patient in average would have 5 doses of Ofirmev per day, or each patient would in average have 10 doses ( two days ) per hospital stay.

If we count 5 working days in a week for elective surgery, we have 20 days in a month, or 240 days in a year. 240 days for one OR times 4 patients per day is 960 patients per one OR, per year. Each patient will have 10 units of Ofirrmev per stay. 960 times 10 is 9600 units per one OR per year. Five ORs would be 48000 units, meaning each hospital would use 48K units per year. 48K times 500 hospitals is 24M units, times 10\$ per unit would be 240M revenue for Cadence. Meaning CADX will generate 240M in first year, 480 in second year, and 720M in third year. And, this is only for elective surgery, and I believe I have been conservative with my assumptions. Add to this emergency surgery, OR working 12 hrs, or all day ( general surgery, trauma, labour and delivery, gyne, and so on ), plus ER, ICU, NICU, non-surgical patients ( like medical floors ), pediatric patients, and non-pain indications ( fever ), and on the end count on Canadian patients ( I hope Ofirmev will be approved here rather sooner than later ). There are over 2000 hospitals in US. There are over 20M C-sections per year in US ( quite a few of those are elective surgery ).

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• I think you calculations aren't too aggressive. In the pediatric world there are probably thousands of tonsillectomies done every day. An ENT lineup with 15 cases not unusual at all and at least 3 or 4 of those lineups every day in each hospital. Perfect case for Ofirmev. Can't use Toradol,very painful, high narcotic doses required. High incidence of N and V. Many doses will be given. Also will find its way onto many post op PCA orders scheduled every six around the clock.

• Dragan:

Your estimate is probably a worst case scenario. Despite the fact that the avg # of OR's per hospital in the US is likely closer to six than 10 (based on a number of available online statistics), your other assumptions are highly conservative (re not counting any non-elective surgeries, or non-analgesia indications). Nice job of putting together the basic factors influencing sales.

Rex

Your numbers look fine to me overall except I think your 2011 numbers (total) are a bit high, which then makes future years off too a bit per my humble opinion. I think hospitals uptake will go quicker than many think, but your 2011 sales are very rosy!

I do believe that this drug will over time out sell whats going on in the EU, but those first two years monetary numbers listed are very aggressive. Not totally out of line but very agressive.

Its still all good and this stock is worth way more than its current PPS with standard multiples added to drug sales IMO.

I hold and add under 7.00 incrementally! It just takes patience and the shorts will go away and this will go go go!! Numbers over hospital uptake and sales numbers will make it so.

Classic mid-term investment from here.

BMY jumps on CADX---so be it. Longer they or another waits, the more expensive it will be for them no matter what Mr TD says!

JMO

Kutz