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Insmed Incorporated Message Board

  • fud.fighter2 fud.fighter2 Apr 10, 2014 9:03 AM Flag

    CF sales in Europe = MDR-TB sales Worldwide

    Dr. Sundari Mase of the CDC's TB elimination branch, lead author of the federal guidelines last year covering off-label use of bedaquiline in MDR-TB, noted at the time that most drugs used to treat TB are off-label.

    The CDC-recommended 24-week course of bedaquiline tablets will cost around $30,000.

    A 12-week course of Arikace would likely cost $15,000 to $20,000.

    Arikace would also be free of the concern that 10 of the 79 patients who took bedaquiline during its Phase II clinical study died (vs 2 of 81 in the Control arm),

    and would be free of the risk of interaction with other TB or HIV drugs in the bloodstream.

    How likely is it that the people at the NIAID who suggested the NTM study in the first place, and the pulmonologists involved in the CF and NTM studies (many of whom are likely to treat TB as well) haven't made the connection?

    Insmed - "In the case of NTM, the barrier to effective treatment is in gaining access to the interior of infected macrophages."

    Lewis - "IV amikacin is used to treat this patient population right now. You can't get enough amikacin into the lung through IV to successfully address this disease."

    If injecting amikacin into the bloodstream to kill NTM sheltering within the pulmonary macrophages is nowhere near as effective as delivering concentrated amikacin directly to the NTM - must not the same be true of injecting amikacin into the bloodstream to kill TB sheltering within the pulmonary macrophages?

    No physician in the World is going to give a child a drug associated with hearing loss and kidney damage if a version of the drug is available to the physician which is far safer and more effective.

    Amikacin injection is currently a WHO top-ranked therapy for around half a million people infected with MDR-TB each year - it's not a question of if there will be off-label use of Arikace.

    The question is how much initially, and how quickly the WHO will include Arikace in the recommended antibiotic regimen.

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    • Good question! We know this much for sure -

      1. from that CDC guidance about off-label use of bedaquiline that most drugs used to treat TB are off-label.

      2. that amikacin injection is routinely used to treat both drug-resistant NTM and drug-resistant TB.

      3. that two companies (undisclosed) approached Insmed some time ago with a view to a deal to commercialise Arikace in Asia.

      4. that the Chinese regulatory authority is expediting its approval process for bedaquiline.

      5. that the $30,000 price of a 24-week course of bedaquiline (assuming the Chinese health authority pays that much) is around twice the anticipated price of a 12-week course of Arikace.

      6. that a 12-week course of Arikace converted 11 out of 44 patients with drug-resistant NTM to culture-negative within 12 weeks - the majority within 4 weeks.

      7. that China is currently seeing around 120,000 new cases of MDR-TB each year on the mainland alone.

      What we don't know is the extent to which China will be motivated by the risk of loss of hearing and kidney damage which comes with a six-month course of aminoglycoside injections to pay the difference in price between amikacin injection and Arikace.

    • Assuming Insmed charges only $15,000 for a 12-week course of Arikace for MDR-TB - a share price of $20 today would be warranted by the anticipated use of Arikace two years from now by just 20,000 of the estimated 500,000 infected with MDR-TB each year.

      That $20 share price would assume zero use of Arikace for either CF or NTM - and would be based upon a price/sales valuation multiple of 4, the value of that revenue stream to a big pharma.

      A more reasonable price/sales valuation multiple for a company at Insmed's stage of development would be at least 8 - meaning that a current share price of $20 would be warranted by the anticipated use of Arikace two years from now by just 10,000 with MDR-TB -

      $15,000 x 10,000 x 8 x 0.8 x 0.8 / 40,000,000 shares = $19.20

      You'll believe it when the professional investors finally show their hands - and the analysts following Insmed finally mention MDR-TB - and the share price is over $100.

      But for now almost everybody who reads this will find the current share price far more believable - and fail to make the most of a once in a lifetime opportunity.

      • 3 Replies to fudfighter4
      • So our current share price assumes the only use of Arikace in two years time will be in the treatment of about 10,000 of the 450,000-odd cases of MDR-TB?

      • Listening to the replay of the most recent presentation I wondered once again why none of the people who ask questions in the Q&As have every mentioned the possibility of Arikace being used in TB.

        I'm guessing at at some point before the presentation it's made clear to the audience that those presenting will be unable to make any comment which could be construed at promoting the off-label use of a drug - and will only answer questions about the indications for which the drug is currently being studied.

      • From the World Health Organisation's Global Tuberculosis Report 2013 -

        1. With a bearing on Insmed's value in the event of an acquisition -

        "Short, effective and well-tolerated treatments for latent TB infection, a point-of-care diagnostic test, and an effective post-exposure vaccine are needed to help end the global TB epidemic."

        An estimated 2,000,000,000 Worldwide carry latent TB infection. No current TB therapy comes anywhere close to being "short, effective and well-tolerated".

        2. With a bearing on Insmed's market valuation today -

        In 2012 there were 8.6 million cases of TB with 1.3 million deaths - and 450,000 cases of MDR-TB with 170,000 deaths.

        Around 95% of TB in 2012 is estimated to have occurred in low and middle-income countries. But that still leaves an estimated 22,500 cases (possibly higher now) of MDR-TB in high-income countries.

        Imo Arikace would be far safer and more effective than the current WHO-recommended course of aminoglycoside injections known to cause loss of hearing and kidney damage.

        Ask yourself a simple question: Based upon the information you've read (that the Arikace liposomes are taken into the pulmonary macrophages which shelter the TB) - if you were a doctor, and a family member became infected with MDR-TB - which of the two would you prescribe?

        Assuming some use of Arikace for MDR-TB also in middle-income countries, and a price of $15,000 for a 12-week course, and a market valuation price/sales multiple of 8 - imo MDR-TB alone warrants a share price today of -

        $15,000 x 30,000 x 8 x 0.8 x 0.8 / 40,000,000 shares = $57.60

 
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