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Vertex Pharmaceuticals Incorporated Message Board

  • johnf50 Dec 20, 2011 4:54 PM Flag


    I was wondering how VRUS became so overvalued...

    "In order to accurately reflect the evolving landscape of HCV research, the Company’s senior management prepared one forecast model and provided assumption ranges for the Board’s consideration. The following table presents certain specific material metrics that were used to generate the Updated Forecast, which, as discussed above, reflected an application of various commercialization assumptions of the Company’s senior management to an HCV therapy scenario, and also included ranges of
    possible deviations for each of the relevant commercialization assumptions." - VRUS executive management.

    Under the assumptions VRUS used for the HCV market space growth in the Gilead purchase agreement they use a rate of 10% to 15% and then to 10% stabilized with a 60% to 80% market capture based on genotype.

    So if I work backwards... 1.5% population growth... 3% market penetration per year if the same as what is currently expected for VRTX... and 10% market growth per Morgan Stanley... that means the HCV patient population... according to VRUS... is expected to grow 14.5% to 19.5% per year!!!

    Sounds like everyone is sharing needles and we have free love again... at least that is what must be happening on the Gilead executive team... because they just bought VRUS's BS.

    ~ J.

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    • I agree that the VRUS projections of growth in the HCV market are probably way too high but I think there is some truth to the idea that the market may grow significantly. I recall reading that most of the 4 million infected with HCV in the U.S. are unaware they have the virus. Now that effective treatments have reached the market, there will likely be more testing for HCV and the number seeking treatment should increase. Vertex and other HCV drug makers should all benefit from this. Vertex management has said they expect a fragmented HCV market in the next several years and I would assume their goal is to capture as many of these "fragments" as they can--especially the more difficult to treat cases. And with more testing and screening for HCV, all parts of this fragmented market should grow.

      • 1 Reply to swhitemd50
      • [ . I recall reading that most of the 4 million infected with HCV in the U.S. are unaware they have the virus. ]

        If the infected are not aware they have been infected , how and who know they are infected ? That does not make any sense.
        No one is going to see doctor and ask to be examined unless they have syntom of the disease.
        I wonder if bribery somewhere along the line may not be involved in this buy out decision.

    • In most of the news releases at the time of the announced merger, the following sentence appeared, apparently as a justification for the high purchase price:

      " Market-research firm Decision Resources estimates the global hepatitis C market will hit $16 billion in 2015, up from just $1.7 billion in 2010."

      It is with great difficulty that I find this forecast even remotely possible.

      Decision Resources must be forecasting that approximately 10X more HCV-infected individuals are screened, diagnosed and treated once an all oral treatment is introduced, than are presently being treated.

      Go figure!

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