T-DM1 is only approved for patients that have failed perception--right? So the "approvable" population is small, but we should be picking up off-label use. Obviously Roche doesn't want to cannabilize Herceptin sales. Wonder if the insurance companies won't be willing to pay for T-DM1, given the higher cost relative to Herceptin. If so, then how many "rich" people will be on this!
Full year 2012 sales for Herceptin reported by Roche $5,889 CHF. In US dollars that is ~$6.5 billion. By 2015 Roche will likely have completed their trial and received approval for TDM1 for 1st line MBC. I see from the Roche materials that there is also data expected from a gastric clinical trial expected in 2015, and also early BC (not MBC, but early BC) in 2016.
Also from the Roche materials the Herceptin market grew 11% in 2012. So for easy math and a good conversation to have with friends over beers after work, assume that TDM1 will have a minimum of a 20% price increase over Herceptin, and over the next two years grows at 11% and the majority of the Herceptin franchise has been transitioned over to TDM1. So by 2015 you might see sales of TDM1 approaching over $9 billion annually. Now that is a bullish outlook, even from me who has followed this story since early 2009.
Thanks, as always CH. 5% of 9BB is 450MM. To keep the math simple, assume IMGN has 100MM shares outstanding that's $4.50 per share. At a 20 multiple we get $90/share. Hopefully, by then another compound, or multiple compounds are well advanced and IMGN is not valued just based on projected and underestimated T-DM1 revs, as is the current situation. I just got excited! Holding a LT position and trading some based on the technicals works for IMGN IMO.
The possible revenue numbers and royalties are not yet recognized by anybody that works in the investment community- not that I can find. At the same time you have a boatload of short-sellers who make a habit of shorting low or no sales revenue biotech stocks in late- stage trials expecting denials or delays- historically they are right way more than wrong. I think we may have a perfect wave building here.......
Being able to charge for a higher premium for T-DM1 and the fact that herceptin is going off patent, the goal of Roche is to replace Herceptin with T-DM1. I would not be surprised if T-DM1 will be used as a first line agent in many cases. T-DM1 sales will exceed most analyst projections.
Roche intends to transition every HER 2+ cancer patient onto TDM1 over time. As the label expansions come, thus TDM1 sales will increase. Herceptin goes off patent in a few years and there will be biosims available to try and take a piece of that Herceptin franchise. By the time that happens TDM1 will be probably close to or approved as front line therapy for breast cancer and perhaps other HER 2+ cancers.
I wouldn't really say that Roche is cannibalizing Herceptin since TDM1 is Herceptin + DM1, rather they are building on an existing foundation and have a better more efficacious drug to offer patients, thus obviating a very large percentage of the existing Herceptin market.
Thanks! What you say makes sense. Forgot about the patent issue! I'm pretty sure they didn't want to start a clinical trail with Herceptin and T-DM1 side by side comparison--they are pretty expensive.
Wonder about reimbursement issues ij the short term!