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ImmunoGen, Inc. Message Board

  • chinesehamsters chinesehamsters Feb 25, 2013 4:17 PM Flag

    Kadcyla long term sales estimates

    Keep in mind that these estimates are assuming we get label expansion across all stages of breast cancer, so these number are in 2017 to 2018. Based on Herceptin 2012 full year sales of $6.36 billion US, and Herceptin cost per month ($4500) we can back out approximately how many patients were treated last year.

    Using that figure and assuming that the patient population is at least that for Kadcyla we can project what sales might be in 2017/2018. Kadcyla will be priced at $9800 per month, and using that same patient population we would project total annual sales of approximately $13.9 billion.

    Taking the middle of the road average on the sliding 3-7% scale, that is $695 million in royalties to Immunogen. On 85 million shares that is $8 and change in earnings. Apply whatever multiple you want at this point to get your estimate of what the share price might or should be.

    Chinese Hamsters

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    • taking the "short-term" view, Junius presented today and said that with the recent approval there are 14,000 patients that are now eligible for this drug in the US. So when the drug is available in less than two weeks, if most of those patients switch over to tdm-1 that puts the annual run rate at 14,000*$94,000 = $1.316B. Based on their royalty rate (3% for first $250M, 3.5% 250-400M, 4% 400-700M, 5% over 700M) that means royalty revenue should ramp up to $54M/year pretty quickly.

      If you look at analyst estimates, for 2014 the revenue expectations run from a low of $13M to a high of $73M, with an average of $46M, it seems to me that some revisions should be forthcoming. Especially when you factor in additional milestone payments, approval for other than just the relapse patients, and approvals in other countries ramping up over the next several months. Unless I'm running the numbers wrong, 2014 revenue is going to be a higher than even the highest current analyst forecast.

      Sentiment: Buy

      • 2 Replies to winston1961
      • Good work winston and CH, thanks! Some analysts (those smart and not conflicted) have caught on. The conflicted, paid bears will wait for sales data evidence before they come kicking and screaming in protest unless of coures they smell the opportunity for more fat fees through participation in a secondary.

        AFFY patient deaths put a little fear of an FDA slow down, larger cardio trial size demands back into the biotech market at least in the short run. It's impossible to eliminate all risk, they just need to do a good job monitoring and it seems that in this case they caught the problem fairly fast. Can't AFFY/Takeda just add a step to test for a reaction with a smaller dose before administering the full Omonty?

      • The cost of the drug is $9800 per month, so a little over $117,600 for the year. For those 14,000 patients that are immediately eligible, and assuming they all got the drug, that is $1.65 billion to Roche. Based on the sliding scale above that is $72.3 million to Immunogen in royalties, and that equates to $0.85 earnings per share. So most analystw are underestiimating the potential.

        Chinese Hamsters

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