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Biogen Idec Inc. Message Board

  • peadar_og peadar_og Dec 3, 2004 10:36 AM Flag

    Market for Tysabri

    It�s estimated that about 350,000/380,000 MS sufferers are currently on one of the four main MS treatments. These are Avonex, Rebif, Betaseroun, and Coxapone (spellings??). Only 50% of these are well controlled, and well controlled is a relative term in this case. It�s also estimated that more than 100,000 sufferers have tried and dropped out of existing treatment regimes. FWIW, I feel that the dropout numbers are much higher. It seems from Biogenidec�s recent CC that they get about 12,000 new starters on Avonex each year, and still the total patient numbers on Avonex have been static (at best) for the last 12 months. Revenue hasn�t increased, despite some price increases.

    According to a recent CC by Teva, 55,000 new patients are diagnosed with MS each year. It seems that only about 25% of these are trying one of the four main therapies. Perhaps that�s because not all have access. My guess is that this percentage would be much higher if the available treatment was better. That�s where Tysabri comes in.

    No matter, overall penetration levels are extremely low when you consider that about 2.5 million people have MS (70% with relapsing form), and another 50,000 or so, are newly diagnosed each year.

    So roughly (conservatively), there are several groups of MS patients, potentially in the market for a treatment like Tysabri.

    There are 350,000 patients on current therapy.
    175,000 well controlled.
    175,000 not well controlled.

    There are 100,000 dropouts.

    There are 50,000 newly diagnosed patients each year.

    There are over 2 million MS sufferers not treated at all. Elan recently estimated that about 450,000 of these might be reachable.

    We now know that Tysabri is priced at $23,500 per year to wholesalers. In fact, this is about twice as expensive as the average of current therapies, but let�s work it out by numbers of patients.

    350,000 patients on current therapy * 23,500 = $8.25 billion.

    That is, the current penetrated market is worth $8.25 billion for Tysabri. In consideration that about half these patients see very little benefit, (if any), from existing treatments, and the fact that Tysabri is more than twice as effective as the next best treatment, is much safer, and is easier to administer, I�d say that Tysabri should easily capture 60% of this existing market. IMO, that is conservative in the extreme. Still, it would represent about $5 billion in annual revenue.

    I believe it�s also reasonable to expect that Tysabri could easily capture 50% of the 100,000+ dropouts. That�s 50,000 patients (perhaps even double that) at $23,500 per patient = $1.2 billion.

    I also feel it reasonable to expect Tysabri to capture at least 12,500 newly diagnosed patients each year. That represents annual revenue of $1.2 billion in just 4 years.

    It�s also entirely likely that Tysabri can extend the market into at least another 100,000 patients who have never tried existing treatments. It could do a lot better. I�d conservatively add another $2.3 billion annual revenue for that group within four years.

    Conservatively, that�s almost $10 billion annual revenue in four years or so. Realistically, it should probably be a lot higher.

    FWIW, I believe that the market for CD is every bit as big as the MS market. The market for UC is twice as big again. The RA market is the biggest of these four. Tysabri will be targeted at many other diseases.

    IMO, Elan will do well to stay independent, unless the share price trebles/quadruples from here in double quick time, and even then it would probably be a steal. Triple digits are not so far away.

    All eyes on manufacturing capacity.

    Peadar 'Og

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    • Peadar
      Thanks for the intelligent posts here and on the Elan board. I get bored with all the other verbal attacks that others have to vent.

      I'm confident with the manufacturing capacity for Tysabri and even visited the manufacturing site in Oceanside California. Very impressive facility. BTW the same development firm built the RTP facility for Biogen (pre-merger)

      It's all about marketing and sales as we move forward with an understanding that there limited product label claims until all the data is in. The 2 year data should clear everything up. If marketing is done right Avonex should still be around and Tysabri will skyrocket.

      Go BIIB/Elan!!!

      • 2 Replies to speakeasy5152
      • Is RTP sufficient to manufacture Tysabri, Avonex and Amevive. I know all the fill/finish is contracted out (other than clinical level). I'd love to see BIIB fill/finish its own commercial drugs, but that is a long way off (if ever).

        I know Avonex formulation is completed at the Cambridge site. Is there any news on when direct to acetate will be approved by the FDA?
        Right now all the Avonex is reformulated from phosphate with a loss of ~25%/batch. This has been going on for 2+ years. Kind of a sad way to make a billion $ drug.

        I hope Denmark comes on line in a few years along with Oceanside. I'm also looking forward to seeing the updated clinical fill/finish facility (in the works at Cambridge -- Bio6B???--) as the current facility is 20+ years old!


      • Not quite. The same engineering company that built RTP built the Oceanside halfway then later taken over and completed by a 3rd class engineering firm. So let's hope the product coming out of Oceanside, Ca is within spec.

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