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Vanda Pharmaceuticals, Inc. Message Board

  • kampaakampaa kampaakampaa Jul 9, 2010 6:24 PM Flag

    Kampaa Fanapt sales estimate Q2

    If you look at my estimate the exact accumulated sales is $16 685 495 end of June. Then reduce that number by $1 486 170 (Q1 known TRx).

    Q2 by kampaa estimate is $15 199 326 by TRx growth

    That number is 3 times higher than what Jefferies and Hapoalim estimates. Madison William has much lower# close to $1M.

    The weekly growth rate seen so far has been in line with my estimate. This is without any extra pharmacies stock selling.

    BUT REMEMBER a lot of schizophrenic patients get their meds delivered DIRECT to group homes and in long term care facilities; and these antipsychotic scripts are NOT counted as TRx by IMS health --> So my estimate can by MUCH lower than reality. So we can see a real surprise number next week !!

    http://chart.ly/xfkw8q

    The numbers that come from novartis won't be the actual prescriptions sales, but dealer stocking. I would imagine they added just as many or maybe a little less pharmacies and hospitals to their distribution network as the first quarter. So $21 million is the baseline as reported in Q1.

    Take $21 million - $1.5 million (actual prescriptions TRx), the original pharmacies had $19.5 million in inventory at the beginning of the 2nd quarter. If my $15.1 million in prescriptions is correct, the inventory restockings would be $15.1 + $1.5. So sales figures would reach $20 mil (new pharmacies) + $16.6 (restocking) = $36.6 million.

    So Q1 sums up to with restocking $36.6 million + sales direct to group homes and in long term care facilities.

    This number is roughly min 7 times higher than best estimates from Jefferies and Hapoalim. And they have PT: $15 respectively $18,5


    credit to grahame811 regarding restocking scenario

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    • I think thats why Vanda went up with TTNP's report - people are pretty happy with the script numbers. Q1 rev numbers were good but nobody cares, see - the stock market tends to be forward looking, just the way it is. So when Q1 scripts were low and rev was high, the stock got dumped to the crapper. Now, Q2 revs are low but scripts are picking up nicely - many see this as the opposite of Q1 when the stock went down. Now, looking forward with my "Magic 8-Ball" I ask it whether rising script numbers will converge with rising rev numbers in the future and it says...whoops, I have to shake it again, it did that thing where it ends up between two answers. Anyway, here goes ....it says "definitely!" Whoops, that maybe some dust on the surface...

    • Guys, I just don´t understand you. Do you expect Vanda to report other sales figures than Titan did? Are the royalty Titan is receiving based upon other Fanapt NET sales numbers than for Vanda? It sure look like the same numbers in the SUBLICENSE AGREEMENT!

      "SOUTH SAN FRANCISCO, Calif., July 23 /PRNewswire-FirstCall/ -- Titan Pharmaceuticals, Inc. (OTC Bulletin Board:TTNP.ob - News) today reported that the company expects to receive a royalty payment of approximately $55,000 on second quarter 2010 sales of Fanapt (iloperidone) of approximately $693,000. This reflects a significant decrease from first quarter sales which, as is customary, included substantial initial product stocking in the distribution channels. Prescriptions for Fanapt, an important indicator of market acceptance during product launch, showed a positive growth trend during the quarter according to analyst reports which showed that total weekly prescriptions for Fanapt grew from approximately 475 prescriptions/week at the end of March to about 1,210 prescriptions/week at the end of June."

      http://finance.yahoo.com/news/Titan-Reports-Second-Quarter-prnews-1040385327.html?x=0&.v=1

    • The growth to 1,210 prescriptions/week (per TTNP) is encouraging but I've not found concrete information about what that means in actual dollar figures for NVS. The data had beneficial effect on VNDA's stock price on Friday but the volume was light and the shorts are yet to be squeezed. I hope that Poly gives more details in his quarterly CC in about 2 weeks. Until then, over exuberance is unwarranted.

    • You didn't say they have to break even, but you imply it in every post you write. Almost no bio companies even bring in revenue and to see one that does, and a growing revenue at that, is promising.

      The guy who said "that puts it a pace to bring in 100 million" is not giving a true projection and you know it. In that article he was acting as though all of the 21 million was in true sales and not stocking, so his point of view is simply not valid. If you can find a Novartis sales projection or a Vanda sales projection than I will believe you, but I will look at the Hapolim(sp?) sales projection of around 60 million.

      That means 60-21= 39 million for the next two quarters. They know what they are talking about and have a price target on Vanda north of $15 I believe. So, if it hits around their projection than we are on the right path. It is all about the journey of Fanapt; not just the here and now.

      I will be honest and say that I had my doubts about Fanapt going into this quarters numbers release, but now I am sure that it will be sucessful. You're throwing everything but the kitchen sink at those numbers to try to discredit them, but the truth is that they are GOOD! Will they grow? I almost certainly think they will and I think you and everyone else knows that a drug that has been on the market for less than six months will continue to grow well past the first year at a good rate, but time will tell.

    • clk, Sales increased with 100% in Q1! They went from 0% to 100%. To increase 200-300% in the second quarter sounds good but breaking the numbers down it is still low to reach the projected sales. It is always easy to have good % number in the beginning!

      To generate a royalty stream to break-even is a yearly $80M sale needed. That corresponds ruffly to 2800 subscriptions per week during a full year.

      We are currently at weekly 1200 scripts as per last June as the first week.

      Will sales continue to double every quarter or will the increase rate level out? Time will tell! I think doubling the script rate is possible to Q3 is possible but we are still below generating a positive cash flow. But it could also be leveling out!

      I currently estimate Vanda to break-even during H1 2011. Im still not sure if this month was the turning point for the share price, I will await the Q2 report!

    • There are several similar sources talking about $100M for 2010 after the Q1 report!

      "While the VNDA share price went largely unchanged on the news, the $21 million in Fanapt revenue generated by Novartis should come as an encouraging sign for things to come, because it puts a projected first year of $100 million well within reach. That wouldn't be too bad a take for first year sales at all and would beat a lot of skeptical market sentiment about the potential of the product."

      http://seekingalpha.com/article/199981-fanapt-first-quarter-sales-bode-well-for-vanda-novartis

      Read all comments over sales figures from the Q1 report and compare with todays estimate. The long term Fanapt sales is still wide open and there is still no clear signs were we are heading.

      All indicators suggest slower sales in the third quarter in general but if people on vacation is more unhappy, schizophrenic time will tell. But I think they generally are feeling better during the summer months.

      nowak don´t put words in my mouth, I don´t claim VNDA HAVE to break even, I just simply look at the fact that Novartis sales below $80M will not produce a royalty stream to Vanda sufficient to cover the current burn rate. They will have to use some of the large pile of cash to cover costs like all other biotech firms without a positive cash flow. The $200M will not last for ever but they can run current operations for many years without a positive cash flow.

      Is till think funds holding approx 90% of all outstanding shares will react upon the Q2 sales. If you think it will be a positive reaction you buy now, if you think it will be a negative reaction it could be good to wait until the report. But with VNDA trading at cash the bottom is close. It seams like a strong support between $6 and $6.5.

    • Mid,

      Where did you get the 100 mil sales projection? I am almost positive that they never issued guidance on sales.

      You also stated that this quarter is a holiday quarter and that sales will slow? I don't know what you are talking about there. Doctors still work July-September and people still need medicine.

      Youre claim that we HAVE to break even is just not true, they can use some of that upfront payment they recieved(which seems like a smart move by they now). Sales are dramatically increasing and the PPS had a value of 0 for Fanapt. It is clear now that there is some value to it, so even if numbers don't reach 100 mil they will reach something, and that is a postive.

    • Mid-Swe part 2

      When looking forward, one needs to consider the second derivative to understand the growth acceleration. Where the 2nd derivative is positive, you have acceleration of growth meaning an exponential function. When you plug the rate of change in the sales increase you get a formula that does not run at constant velocity (ie - a linear scalar multiplier) but rather a curve that bends up rapidly for which you need to integrate the area under the curve to understand the total sales. These curves, depending on the growth rate can be somewhat explosive. If this doesn't resonate, I sometimes think of it like when I used to go to the drag strip with my Dad when I was a kid. We'd sit in the stands near the beginning and watch these dragsters pull up and when the green light would light, they'd gun the throttle and sometimes the cars would go sideways and shitloads of smoke from the burning rubber would be coming up and burning your eyes and you'd be laughing at first because the car would be barely moving but as the tires begin to bite, tremendous force would begin to transfer in the car's chassis and the whole thing would start to twist as the car would even sometimes rear up on its back wheels. The track was a 1/4 mile long track and it would take like 1/3 of the runtime just for them to get out of the box but then in a blink of the eye, they were gone! Their end velocity depended less on that initial loss of speed off the jump and more on the pure acceleration they had coupled with the amount of distance left on the track. I know you don't like Kampa and all that and I know how he gets people a little exhausted with all his postings but you might take a look at some of the exponential plottings he's given and you can get some ideas how these things can play out. If fanapt is running at close to 40 mill after 6 months time , many of those months spent spinning their tires and smoking the wheels and not going anyplace then that means the acceleration to get where they are right now is all the more dramatic. Based on current run rate, depending on to what extent the current trends continue (they could slow or speed further), the year end run rate could be 100 million, 200 million or even 300 million. If one picks the middle number, say 200 million and then one plugs that in for the next year, it is possible to see pretty meaningful sales began to pile up. The cool thing is that those sales are occurring with a twice daily, US only product! A depot and further expansion into the rest of the world can take this drug from 500 plus million to 1 billion or 2 billion or 3 billion or who knows? Zyprexa is like 5 billion a year and it causes Godawful weight gain for many and people know this! Schizophrenic does not mean stupid! For some people, it is likely to work well but with less weight gain and less tardive dyskinesia (spelling?). Anyway, I've got to run. You have your view and I have mind and no matter, the reception and quality of this drug will ultimately determine its fate. Chances are, some if not many will like it but who knows? Good luck to you Man!!!

    • Mid-Swe;

      I must be confused....if you could clear it up that would be nice. My understanding is that a fanapt script is a monthly script. So when you get a weekly script rate, you are actually getting the numbers of scripts for 1 week out of a month and to get the actual monthly script rate, you than need to multiply the weekly script rate from the last week (to get the most current rate) and then multiply that by 4 because their are 4 weeks in a month. This would mean that if there are 1200 scripts in the last week of June (the last week for which I've seen a figure) then multiply that by 4 you get 4800 for the monthly purchase script rate for the last rate at the end of June. If one does the math, this tracks to about 4800 per month X 600 per script to get the run rate at the end of June of about 2, 880, 000 for a month ending June. Multiply this by 12 and you get a present sales rate of approximately 35 million. Since Q1 had a sales rate of much less than one million per month average, it has gone to approximately 3 million per month in just 1 quarter. I will continue in next message due to character limit

    • csk, The Novartis sales budget for 2010 was $100M and we are half way now and you are talking about just $40M like something positive? So far sales is a huge failure and the prescription rate is currently only at a $8M quarterly rate vs $25M budget or $20M break even level for VNDA.

      The BIG question is if the prescription rate will continue to grow or level out. Q3 is a vacation month with IMO slower sales.

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