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Curis, Inc. Message Board

  • bungeefallingknifecatcher bungeefallingknifecatcher Feb 3, 2013 12:44 PM Flag

    the presentation on the Curis home page is impressive

    their products work.

    when did we get Mexico approval?

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    • was the conference today reporting new?

      Australia will be a huge market.

    • Using the information that is in the Curis power point and some other articles on the internet, it looks like Curis is in really good shape at this point. I thought I would do a little exercise here to see where we might think Curis is valued in the next year or two.

      Based on what Curis calls out as the potential patient population both in the US and the EU for aBCC we can make some educated guess at earnings per share. Erivedge is dosed on average for 13 months per patient, and monthly cost is $7,500. So using this I get a cost of $90K per year per patient. The total US and EU patient population with aBCC stands at around 40,000. Assuming what may be an unrealistic market penetration of 50%, we have 20,000 patients on the drug. That is total Erivedge sales of ~$1.8 billion annually.

      For Curis they get royalties of 5-10%, but I am using 5% here as I cannot find any reference that breaks the 5-10% scale down. I assume it is a sliding scale and once a certain threshold is made the percentage goes up until the next threshold is achieved. So 5% of the $1.8 billion is ~$90 million to Curis in royalties. With 80 million shares outstanding that is earnings per share of $1.125. I looked at 13 other biotech/pharma companies and the average P/E for them is about 19. So that would make Curis a $21 or so stock, keep in mind this is before deducting for any expenses.

      Now, a few things that would add to the upside to these earnings in a very significant way is if the label is expanded to BCC patients that are operable. That patient population is huge, over 2 million patients world wide. But in a more practical sense, about 2% of that population are poor surgical candidates and would therefore benefit from Erivedge. Coincidentally that is about 40,000 patients world wide. So basically doubling the calculations already done above for the aBCC case.

      The real holy grail here for Erivedge is the efficacy in other cancers, primarily pancreatic cancer. In 2010 the estimate for pancreatic cancer in the US was ~43,000 people. Again, roughly the same patient population that we have already looked at in the above case.

      So has anyone seen a breakdown on the 5-10% royalty structure published anywhere. The deal was struck back in 2003. I looked through several 10K filings but did not find anything.

      Chinese Hamsters

      • 1 Reply to chinesehamsters
      • Looking at the Q3 expenses for Curis we can also make an educated guess as to earnings taking the expenses into account. Q3 was $5.5 million in expenses, so for a full year let's use $22 million. Our total royalty from the previous post on Erivedge sales was $90 million, deducting the expenses were at $68 million. Across 80 million shares that gives us earnings per share of ~$0.85/share. Using the average P/E ratio from above of 19 we get around $16.50 per share.

        The biggest threat to Curis is that Roche buys them and we don't get to realize the full potential. Their market cap is only $245 million, and Roche is likely expecting to pay them at least $90 million a year in royalties. What would you do if you were Roche?

        Chinese Hamsters

    • i believe it was a couple of months ago. only eu and australia give milestones from my recollection. israel came on board jan 1 2013.

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