You might think that better than 100% sales gain YoY, a plausible story about why that should accelerate in existing territories and imminent opening of a potentially more-lucrative new territory would be enough to push ITMN up for at least a day. I mean, the evil bogey of $60MM quarterly sales in Europe and the meaningful bogey of $75MM quarterly sales to pay for normal operations ought to be bagged within the year. You might live in Oz, too.
I think the big negative to the stock price was reported progress on Son of Pirfenidone. More potent, easier to take, greatly reduced side effects, and talk about a Nephew of Pirfenidone, too. An important pipeline product makes the company harder to value, which makes a buyout less likely. The scleroderma project has the same general effect. So I think the buyout soon Soon SOON crowd are dialing down their holdings, and I think there are a lot of them.
I don't think we're suffering as much from the other bane of investment in drug developers: the transition from being priced as a pure pipeline to being priced on results. Even the dream outcome of present initiatives, a company with a small stable of drugs combatting a wide array of diseases characterized by fibrosis, wouldn't look like a REAL drug company..."I can't define it, but I know it when I see it." It just seems like a company that would be priced on ultimate sales rather than contemporary earnings (possibly because it would still be an attractive target for other pharma, private equity, or any other predators out there)
The actions announced are compatible with continuing independence, but I didn't hear anything incompatible with a business combination either. Interesting times.
Thought the "guidance" on sales was interesting - never heard them do that before. But they're approved in all the EU countries except Spain (and no Japan or Latin America), so existing sales growth will slow from present levels until US sales kick in.
As far as your concern over SoP and other compounds in the pipeline, aren't the costs for Phase I going to be fairly minimal?. The sclerodema (SSc) results are likely to be more pivotal if positive - prevalence is about 100,000 patients in the US with 40–75% having measurable changes in pulmonary function tests (PFTs) and 90% by HRCT - and they would follow with a longer Phase II or move on to Phase III. So they could be enrolling for a SSc Phase III in two years....
My principal concern isn't with the costs of qualifying SoP or of a label expansion drive for Pirfenidone. It is with anything that creates a large uncertainty about the value of the whole company. A lot of ITMN investors count on being taken out at a premium fairly soon, and if they see increased obstacles to a takeout, they may take what they can get now and go elsewhere.
Where R&D expenses figure in is in the need for more financing. It looks to me like the cash cushion is just barely enough to do the US rollout. GAAP earnings are probably like 7 Qs in the future, so they won't pay for registration studies, which might plausibly start in 4 or 5 Qs. Whatever is done to fill that gap will look like [and be] dilution. We won't be able to count on as strong an orphan disease tailwind for SoP (nor probably in SSc lung disease) as we've had in the past (not that it's FELT much like a tailwind).