Even a “small” antipsychotic moves the needle for FRX With positive Phase III schizophrenia data for cariprazine now in hand, FRX appears to have a viable antipsychotic. We have not updated our model to include value for cariprazine, but we believe the drug could have significant sales potential if it is sufficiently differentiated from other drugs in what is a highly competitive but huge market. In this note, we discuss some background on cariprazine and the class, and describe a few scenarios which may help investors assess the value of the product to FRX. We note that even a relatively “small” antipsychotic ($250mn year-5 sales) could represent significant value to FRX ($4/share of DCF value). We look forward to detailed data later this year to help better assess the competitive profile of cariprazine. We expect extreme investor apathy to give way to increasing interest as the pipeline matures and the cash position grows. Reiterate Buy.
frankpostin, usually i don't respond to dumb posts,but yours are the exception. i can tell that you are not in touch with the happenings at frx, before you post try to know what you are saying. hopefully people won't listen to your dribble.
Don't forget the hard lessons learned from HGSI and DNDN. Those "DCF value" pumped HGSI and DNDN to sky but the sales (EPS) brought them back to earth. DCF is based on future "peak sales" and it is easy to be inflated. With current healthcare environment, the realistic "peak sales" is usually 50% of "analysts" value. Did Teflaro, Daliresp and Viibryd teach you?
"In our view, the Phase III schizophrenia data suggest that efficacy may approach that of Abilify and Seroquel at the higher cariprazine doses. It is more difficult to compare side effects without detailed data, but cariprazine appears less favorable relative to other drugs on some side effects and more favorable on others. FRX doesn’t need a blockbuster A scenario with launch in 2014 and year-5 sales of $250mn, which equates to only 1.4% of 2011 atypical antipsychotic sales, yields a theoretical DCF value of roughly $4/share. In our view, peak sales of $250mn seems reasonable (if not conservative) for an atypical antipsychotic given recent launches in the class."
What they didn't tell you is that Seroquel will go genericizing this year. Competing with very cheap generics (and Seroquel, i.e. quetiapine, is superior than Cariprazine in both effecacy and safety), $250M is too high a goal.
Quite many pumpings for FRX are published recently but their revenue will go down more significantly than their pipeline. It is Wall-Street!!!