JP Morgan Conf: Chairman CEO Hugin quotes on Abraxane
"In the fall, we received FDA approval for non-small cell lung cancer for ABRAXANE. And in the same few months, we received positive Phase III data in melanoma, the first time in 30 years that a chemotherapeutic agent had showed a differentiated advantage over the standard of care, dacarbazine in melanoma.
And most importantly for ABRAXANE, just a month later, pivotal trial in pancreatic cancer showed a clear, statistically significant and clinically meaningful overall survival benefit with ABRAXANE in gemcitabine versus gemcitabine in pancreatic cancer, and that data will be presented in a major medical meeting later this month."
These comments reinforce my belief that Abraxane will become a blockbuster that easily will reach several billions in annual sales. Those that have CELGZ will reap huge rewards from the Pancreatic FDA approval milestone and then 15 or more years of rising distributions from sales milestones. I last wrote that my valuation model places a net present value for CELGZ at $11 which I consider is based upon very conservative assumptions. Happy for all those that have it and welcome to those buying now!
"We're continuing our launch in non-small cell lung cancer in ABRAXANE in the United States. And we are working very hard to ensure that we get our pancreatic cancer regulatory filings done around the world as quickly as possible, and certainly in the next few months, the United States to be the first place to launch pancreatic cancer for ABRAXANE."
"Clearly, ABRAXANE, with pancreatic and melanoma, provides us the opportunity to increase our growth rate over the next 5 years. In our existing franchises, we include our breast cancer and lung cancer indications. But in our opportunity to enhance our growth rate for the next 5 years, the opportunity to get regulatory approval in pancreatic and melanoma gives us the opportunity for increased growth in our overall franchise.
And as I mentioned earlier, ABRAXANE showed clear, differentiated advantage, clinically meaningful opportunity -- advantage in disease where taxane had previously never shown activity. And we're working very hard to get the drug approved in this new indication as quickly as possible. Pancreatic is specially important to give us a global opportunity and make ABRAXANE the kind of important product for patients all around the world."
You forgot to add that Celgene forecast revenue at $1.0 to $1.25 billion for 2015 and $1.5 to 2.0 billion in 2017. Assumes approval for pancreatic cancer at the end of this year or early 2014, and later approval in melanoma.
Makes your "uber conservative" estimates seem like a pie-in-the-sky dream.
Taking the top end of those targets gives CVR payments of $0.14 in 2016, and $0.57 in 2018.
I'll lead it the reader to estimate payments in other years and decide how much they want to discount those future distributions. Any reasonable numbers, however, will be far below your current valuation of $11 to $20/CVR.