Aside from the usual debate over $5M in annual revenue guidance increase/cut, I was hoping to get some drug specific thoughts from anyone that wants to share, compare some notes perhaps (even if they are your overall thoughts BEFORE today). Here is what I thought after today:
Spi-2012- Not sure where to begin. Raj stated $5B market competing with Neulasta. I do not think he misspoke, but he probably should have said something like "$5B filgrastim market overall." Obviously Spi-2012 is not directly competing with Neupogen, which is a chunk of that $5B, but far less than Neulasta. Also Raj stated Spi-2012 is dosed at one-fifth. I believe this was an error, it should have been one-third. Raj also got a question on biosimilars and stated that Spi-2012 is not a biosimilar, and explained that is a different molecule. Probably some inside baseball here, but it is probably going to be seen as a biosimilar if the study is for non-inferiority, which it is. He was then asked if they were looking at non-inferiority in the study- Raj kind of dodged this question a bit, stating they would be looking at more than non-inferiority. Ken Keller gave a better answer on this previously, and said "yes it is non-inferiority." Finally, Raj commented on biosimilars entering this market soon, relegating the issue to Europe and kind of tossing it aside. I believe the questioner was asking specifically about Teva's lipegfilgrastim (Lonquex) and tbo-filgrastim (FDA approved). I believe they are supposed to be released in 2015 and 2013-2014 respectively, although I am not sure if Lonquex is approved in the U.S. yet. In my opinion, if this drug is released in the U.S., it severely limits the upside of SPI-2012, unless there are far fewer adverse reactions or a statistically significant difference in terms of patient response. Not feeling very optimistic about this drug, but glad that he said they will consult with FDA after P2 results.
Hospira’s Inflectra (a biosimilar of Renicade), with approval this week in the EU, is expected to sell at 70 to 85% discount. I’m pasting something I had from a previous post; nothing has changed my mind since then.
“Still, it’s interesting to see how much wider the moat is in the US then the EU and rest of world. Since the EU won’t require a P3 study there are more biosimilars being developed there than in the US. Nor will it need to be marketed as a new drug in the EU as it will be in the US. I don’t know what the requirements are in the ROW but Cipla has been selling several biosimilars in emerging markets at 50-60% discount. Interesting that the Teva’s Neupogen Biosimilar (tbo-filgrastrim/Tevagrastim) study used for approval was against placebo, the SPPI Neulasta study will be compared to Neulasta. Regarding Tevagrastim sales in Europe where it is being marketed, per an article from last August, the treatment has snagged 5% of the market. So from Tevagrastim and Omontys sales that I note below, I get the sense that SPI-2012 will get 10% (plus or minus 5 %) of the market at peak which could change depending on efficacy and competition. And that 5 billion of total market, I would break it out in 3 buckets, the US and EU at 40% market share each and ROW at 20% for sake of argument but not really knowing what % each region actually has…. Look at Omontys and their sales prior to being removed from the market earlier this year; sales of Omontys for the nine months it was on the market were $34.6 million, compared with $1.5 billion for Epogen. Per Affymax execs, Omontys was gaining momentum because of its less-frequent dosing, lower cost and the desire of some dialysis center owners for an alternative to Amgen.”
are you the same person as investor1989?
anyhow, thank you for your thoughts on each of the drugs covered in today's presentation.
So much unknown and everything is speculation at this point.
SPPI-2012. Not sure how it can command market share when its a non-inferiority study. clinicians won't believe its superior and we will have the same issue with the hospital vs. clinic market. The hospital will always go with the cheapest product; generic neulesta. regardless of whether Raj can say all he wants that its a new molecule and not a biosimilar.
Belinostat- If all three drugs will be cycled to each patient, folotyn, isotax, and belinostat; agree it will be a benefit to SPPI. Very costly upfront. $25 Mil over 3 yrs ago and another ~20 Mil (Cash & stocks) with acceptance of NDA. Hope we make that money back within 1-2 yrs. Should be easy because no additional sales force needed; maybe just more RNs to help educate/manage the side effects.
Fusilev. There is no visibility on each drug going forward so I'm very skeptical if they will actually pull through on the sales. Why would they not disclose each drug if they are confident with their projections? Even though marqibo will ship for only September, this will mask any Fusilev shortfall and we will never know. In addition, folotyn has the potential to mask any fusilev shortfall also for this qtr. No confidence with Zevalin so $7.5/qtr is all I'm expecting for this loser drug. I truely hope the revenue will exceed the lower guidance but if it does'nt, I'm not surprise because they can't execute on their projections all the time. I hope the Amgen team will make all the difference; atleast they have performed in the past.
Marqibo. What is the market for this orphan drug with only 1,600 new cases per year? I'm clueless on what kind of pricing this will command.
Sentiment: Strong Buy
Not the same as investor1989.
I agree with most of your thoughts. It is easy to overestimate the potential of a generic or similar drug to overtake another (Neulasta). There are cases where it is quite the opposite, and there can be a fear of switching. It's apples to oranges, but Pfizer has competition for EpiPen, yet there is loyalty to their brand because nobody wants to switch.
If there is no significant benefit, I would keep expectations low for drugs like SPI-2012, although I have not looked enough at differences between Lonquex and SPI-2012. European sales could be a good case study, although nobody over there uses leucovorin either!
Belinostat- Raj went over some more details of information requested by FDA and that the NDA is coming, and re-iterated approval is possible within 6 months of filing. I think this is an outstanding drug, and hope they can move it along through future indications. PTCL can easily be profitable, but this drug has potential based upon the early clinical trials in solid tumors, etc. A bit concerned with TOPO relationship, I know SPPI wants to get this filing right, but TOPO must be getting impatient after talking about an NDA coming in 2011. I think SPPI has rights in N.A. and India. Probably not going to get the others if I had to guess, unless there is a buyout. Also, someone mentioned in a prior post about amending the agreement, I do not know where this information came from, but any insight would be appreciated. More comments under Folotyn.
Folotyn- Raj discussed PTCL in detail and was honest about low response rates leaving patients without options. He seemed excited about Belinostat being cycled with Istodax and Folotyn, and how it would help patients have more options and live longer, as each drug stops working after about 9 months. Also mentioned mucositis, but did not mention the cancelled trial, and hinted about a strategy to get Fusilev involved with the side affect. I think Folotyn can expand the use of all drugs in the PTCL indication, and how can you knock a strategy that helps patients? Not sure if the frontline PTCL trial would add anything, or why it has a star next to it on the pipeline image on the website.
Fusilev- Good to see hospital sales have bottomed, as 2013 should be a low baseline for annual sales. I still contend that another supply issue is bound to come up eventually. I consider this possibility a bonus. I still feel that they were really being coy about the new contracts they had set up, including the one big one they signed for Q3, and that we are going to see upside surprise in Q3 and Q4 here.
Captisol-enabled melphalan- Went over the usual 30 minute shelf life of melphalan being 24 hours now, and went into detail of melphalan being part of CHOP. Very important as the trade name is the "O." This seems like a drug with huge upside potential, as the new formulation would encourage more use and should render melphalan, in its current form, obsolete. This seems like 100% approval, very exciting drug.
SPI-1620- Gave the usual quick rundown. We don't get new stuff here often, unfortunately. NSCLC numbers in July 2015 and Biliary cancer numbers in Nov 2014. This is the blockbuster that makes you get bought out.
Zevalin- Not sure we can expect movement here until ZEST. Raj went over the one treatment for 8 years. This drug is very perplexing, should be huge. Guess its easier to use Rituximab over and over and over and over. Interesting, I was on the lymphomainfo website, and if you go to NHL and scroll down, they have a little applet that streams a video and runs an ad for Zevalin, including that video simulation from the SPPI website. I would recommend checking this out. Good to see the word is around, eventually it has to pick up a little momentum.
Marqibo- Small amount of talk on this, but did not get a question. Raj did mention an SPA on the frontline aggressive NHL trial, that was news to me unless I missed a mention of this during the acquisition call. Results in 2017. These results I am putting in are not from the conference call. There really are a lot of trials completing in the mid 2014-2015 range that it would seem overwhelming for a small biotech. Should be able to bank some money to pay for P3 so the drug pays for itself.
Also, please see my prior post about an incredible story of a patient on Belinostat.
I am starving for a thoughtful debate on some specific drugs, as the opinions around here are usually so general and watered down.
You are on this pipeline issue and are invaluable.
It is not a $5M annual guidance issue, however.
Since SPPI only had $71 M in revenues in 1st H13, then a $150M year in 2013 means $80M in 2nd H13 and is a $160MM run rate going forward for the existing 3 drugs EXCLUDING Marquibo which just started. On the other hand, $200 M in 2013 is $130 MM in the 2nd half of 2013 which is a $260MM annual run rate for the existing 3 drugs only. A BIG UPSIDE difference.
A $100 MILLION Annual Run Rate Difference from bottom to top end. Halfway in between would be great.
Joe, I understand your post. I was exaggerating a bit to make a point, and it was specifically in reference to a slight unofficial "revision" by Raj today, a cut to the bottom line guidance and an increase to the top end. Extrapolating these numbers out through 2014 is relevant, but the way Raj speaks sometimes, I don't think he is very careful and would not read into this one. I think we will still beat on revenue, specifically Fusilev, because they have enthusiastically stuck with their guidance. I just don't think this should be the news from this conference, and too often it is on this board. They said that was the end of guidance for revenues, and I don't think he meant to give a revision.