In comparing IMGN to SGEN it seems the difference in market cap is pretty disparate. SGEN sold $138.2 million in Adceteris for 2012, and they brought in another $67.5 million in license agreements. Just comparing that to the immediate patient population that can be served by Kadcyla (14,000) IMGN will be looking at around $72 million in revenue. They should receive a few milestone payments as well among other license agreements. The companies look pretty even to me at this point, yet SGEN has a market cap that is 2.7X higher than IMGN. To catch up our stock price would need to be around $40ish a share.
WADR I don't think making an investment decision for IMGN based on the comp to SGEN is sound. SGEN is over-priced IMO and it wouldn't surprise me to see a substial decrease in it's market cap going forward. That said I believe pretty much everybody here is underestimating the revenue stream from Kadcyla. I have people inside at Genentech, scientists and pharmacologists who have been involved with the trials- the patients, the doctors, and with the FDA. Privately, they believe Kadcyla is a transformational drug, that it will be approved for first line single agent therapy. From what I understand, the present label is a standard CYA. The fact is when Kadcyla is used as a single agent it is proven to be remarkably non-toxic systemically. That is to say no hair loss, no nausea, no metallic taste as well as minimally accretive in the liver and kidneys. I have seen inside industry figures estimating Herceptin's sales at 9Bil last 12 months and Kadcyla will A)totally replace it) and B) generate 30% revenue per patient. Furthermore it extends Roche's lock on the market thru 2012 as Herceptin itself would have gone generic in a couple years. The oncology docs are REALLY EXCITED about this product, that is a fact jack.......
There is no doubt that Kadcyla will have a higher cost of goods for manufacturing compared with Herceptin. Priced at more than double of what Herceptin is Roche may only generate 30% more revenue per patient. But that only works in IMGN's favor as their royalties are based on sales of Kadcyla. So the higher the cost the more financial benefit to IMGN. And yes, Kadcyla will entirely replace Herceptin sales today and then some as they will also likely obtain label expansions for other cancers like gastric which they are currently evaluating. $9 billion in world wide sales is still an underestimate in my opinion.
you make a good point, I've always been curious if IMGN should track SGEN to a certain degree. SGEN has doubled in less than 2 years as revenue ramped up. I think IMGN will be in for a similar trip as royalties start ramping. Only question is how fast they ramp, and what the ceiling will be. If quarterly revenue increases show enough positive growth, $30-40 range is not unreasonable in my opinion. Of course on the flip side, if things dont ramp too fast stock will probably tread water...
income is key. The analysts won't go out on a limb and make the projections unless the see some income reported. IMGN will get there and the price rise will be fun. I just hope we see several consecutive quarters of earnings surprises because the adjustment to the price will surpass all the shortsighted talk of buyouts.
The analysts that follow this stock, I guess if ther are any, still have not gotten out their calculators. Roche has given them all they need to project the potential earnings based on just this initial approval alone. The gave pricing per month and the patient population that can be immediately served. You should see a very rapid uptake by physicians that have been watching for this drug since at least 2010 when the FDA first snubbed them. I only make the comparison to SGEN now to illustrate how undervalued IMGN seems at this point.
Seems like the Street is finally getting a clue with Curis as well.
That's another higher high. Some of the analysts have figured it out and wrote positive reviews, others may have, but are likely conflicted by hedge fund clients that are short and losing $$. No bail outs this time by IMGN I hope.