Basal cell carcinoma (BCC) is the most common type of skin cancer in the United States. Approximately 800,000 cases of BCC occur yearly. About 79% of all skin cancer cases are BCC, the slowest growing and least dangerous of the three common types of skin cancer. BCC rarely metastasizes to distant sites in the body. BCC develops from the cells in the epidermis (surface layer of the skin) known as the basal cell layer. This type of skin cancer occurs predominately in sun-exposed areas, such as the head, neck, and forearms. Basal cell carcinoma may have many different appearances. It most commonly appears as a small pearly skin-colored bump or nodule. Basal cell carcinoma can also appear as a flat growth, a scar, or a scaling area. Untreated, basal cell carcinomas will begin to bleed, crust over, and then repeat the cycle.
BCC cases: ~800,000 Advanced BCC cases: 1% to 2% or 8,000 to 16,000 cases yearly within the US Estimated Cost of Vismodegib treatment: ~$50,000 Vismodegib annual US revenue: $400 to $800 million Curis Royalty stream: ~7% Curis estimated annual US Vismodegib revenue: $28 to $56 million Curis shares outstanding: 76.6 million
Roche Eyes Cancer Drug ApprovalPrint Share Tweet By: Zacks Equity Research November 14, 2011 |Comments: 0 Recommended this article (0) RHHBY | CRIS Roche Holdings Ltd. (RHHBY) recently announced that the US Food and Drug Administration (FDA) has accepted its new drug application (NDA) for vismodegib for review. The company is seeking approval of vismodegib for the treatment of patients with advanced basal cell carcinoma (BCC), whose lesions could not be operated or for whom surgery would result in substantial deformity.
The regulatory body has agreed to review the NDA, submitted in September 2011, on a priority basis. A response from the FDA is expected to be out by March 8, 2012.
The NDA submission by Roche was based on results from the ERIVANCE BCC study. The study, which reported data in June 2011, enrolled 104 patients with advanced BCC including 71 patients with locally advanced BCC (laBCC) and 33 patients with metastatic BCC (mBCC).
The study demonstrated that vismodegib substantially shrank tumors or healed visible lesions in 43% of patients with laBCC and 30% of patients with mBCC. The median duration of progression-free survival (PFS) was 9.5 months.
Roche has a collaboration agreement with Curis Inc. (CRIS - Snapshot Report) for vismodegib. According to the agreement, Roche is responsible for developing and commercializing vismodegib worldwide, excluding Japan, where Chugai Pharmaceuticals is responsible. Curis is eligible to receive payments upon the achievement of certain clinical development and regulatory milestones. Curis will also receive royalties upon commercialization of vismodegib.
BCC is a form of skin cancer, which, in an advanced form, can cause disfiguring and debilitating effects that could ultimately prove fatal. The disease is generally curable if the cancer affects only a small area of the skin. However, if the disease is left untreated or does not respond to treatment, the cancer may spread further. In such cases, it becomes life-threatening.
We currently have a Zacks #4 Rank (short-term Sell rating) on Roche.
$50000 per treatment is too low when compare to all other recombinant DNA cancer drugs sold by Roche and others. $125000 to $250000 is more like it. But like Roche's presentation, the advanced disease revenue is like to be <1 billion. I use the most conservative estimate of royalty of 5%. The wild card is of course what PE ratio the market will give CRIS. 10 ? 20 ?
IMO the bcc indication supports the current price plus some. As you pointed out, bcc sales will occur in more than just the US and as you pointed out it will easily double the sales estimated in the previous post.
That being said, I am not invested in Curis just for 0449 sales for advanced bcc. Assuming approval comes next March (or sooner as I think it will) I don't see any downside risk from here. My hopes come from the other indications that it is being tested on and what that will do to our annual royalties. If it works not only on advanced bcc but is also used in a percentage of bcc that is not advanced plus pancreatic and lung cancer (among other possiblities) the royalties to this company of only 30 employees will produce a very high EPS. Add to that the potential for Debio's royalties and the 101 revenue in whatever form that takes, and this COULD BE a blockbuster in just a couple more years.
Approval for advanced bcc will just give us a solid base on which to launch a rocket if the pieces fall into place. GLTA.