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Astex Pharmaceuticals, AŞ Message Board

  • jelly1126 jelly1126 Jul 12, 2013 2:50 PM Flag

    Serious discussion: How big of a hit can generic Dacogen be?

    I might be oversimplifying this, and am interested in hearing all other opinions as long as they are not loaded with rhetoric. How much of a hit can generic Dacogen be to Astex Revenues?

    According to today's press release, Dacogen sales in the US for last year were 260 million. With Dr Reddy selling a generic version, could they really take 50% of those sales from EISAI? Would EISAI allow that to happen? It seems that with a generic competitor, EAISAI would tend to reduce their prices and retain at least a lion's share of this drug's sales. Would it be reasonable to say that EISAI would retain something in the neighborhood of 150 to 200 million in sales? Remember, Dacogen is only approved for sales in the EU for use against AML, and that still has exclusivity so can Dr Reddy sell in the EU?

    At 150 million of sales, Astex gets 33.75 million in royalties. At 200 million, they get 47.5 million of royalties. Last year, they said they had 55 million of revenues. Could the revenue shortfall be in the 15 million range?.

    Can the shortfall be made up in milestone payments? Several of the compounds that are partnered are in clinical trials. You can be certain that milestones will be paid when trials advance to the next phase. Can anything other than SGI110 (not yet partnered) advance next year?

    Speaking of SGI110, don't be surprised to hear about a partnering deal in the next 12 months for that one. Can anyone remember what the up front payment that the company received from MOGN when Dacogen was partnered? Could that number be doubled with the potential that SGI110 has?

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    • Great question Jelly. All the estimates I saw from RBC and JMP models have between $20M and $30M the next two years. It will be interesting to see if they estimate the 2014 and 2015 sales forecast in the next CC. Get the impression they will raise the $55M figure for 2013 because they thought that Dac generic would hit on Day 1 after the patent expiration.