VRTX: Wkly HCV Tracker - Incivek Has the Lead - Sales Tracking at $251M-$544M
Source: Citigroup Investment Research
* HCV Market Share - VRTX's Incivek TRx and NRx are 1,552 and 1,140, wk/wk
increase of +13.7% and +8.1%, respectively. MRK's Victrelis TRx and NRX
are 371 and 292, wk/wk decrease of -3.9% and -1.7%, respectively. The
market share based on weekly TRx is: Incivek 80.7% and Victrelis 19.3%.
Wkly HCV Tracker - Incivek Has the Lead - Sales Tracking at $309M-$386M
Yaron Werber, MD
Kumaraguru Raja, Ph.D
Gloria Woo, Ph.D
* HCV Market Share - VRTX's Incivek TRx and NRx are 2,192 and 1,235, wk/wk
TRx and NRx decrease of -2.8% and -0.3%, respectively. MRK's Victrelis
TRx and NRX are 727 and 419, wk/wk TRx and NRx increase of +11.5% and
+8.5%, respectively. The market share based on weekly TRx is: Incivek
75.1% and Victrelis 24.9%.
You're thinking too much, dorkbuster. VRTX is just a toy that big funds exploit to make money up and down.
Short it down to $40 to make some serious $$$ in a week. Then buy like crazy at $40 to start upward momentum into earnings on Oct. 24
I seem to recall that in one conference call someone had said that the number of patients treated jumped (briefly) to 120,000 after the peg interferon drugs were approved.
Partly why I gave those numbers. I was also using worldwide for my estimate.
The flattening prescription trend is why I believe the stock is weak. The flattening trend may also make your numbers more realistic. I'm willing to give it a while to see where the prescriptions go.
Our figures are close - I think we differ because I am also assuming a 30% annual growth rate for next year. The consensus year over year estimate is higher... so I am being more conservative.
And I have also played with my model using a 20% to 50% mark down on revenue just to see what it will do. Presently I am using 20%. However, the citi sales tracking would estimate a bit lower than 20%... but that will be one surprise in the earnings release on what that actually is.
Knowing that script data comes from the pharmacies and the AMA... I am not even sure that we will have Canadian data... so earnings surprise number two from our brothers up north. Being that Canada HCV pts population is only 7% of US... I expect this figure to be positive but not earth shattering.
And along the same precedent, unless there is an EU equivalent of our data system I am unaware of... we will not have Rx data for the JNJ European revenue. That is earnings surprise number three. Being that EU HCV pts population is 143% of US... I expect this figure to be positive and surprising, albeit tempered by the fact it is only a 20-25% royalty. [I haven't been able to get an exact number and in latest JNJ call - they just said 'mid 20s']
Also - I may be wrong, but I think consensus expectations were for a 5 billion total HCV market... with 80% going to VRTX and 20% going to MRK. That leaves 4 billion for VRTX and 1 billion for MRK respectively.
So even at 3 billion with a market multiple of 10... you end up with a share price in the $105 to $125 range. MRK's needle doesn't even move with the revenue due to its size.
And I would expect VRTX to continue to have market dominance until 4Q:15. At that point, my expectation is for revenue from a successful VX-509 to replace and exceed any lost HCV revenues. Where at that time, I am sure everyone's eyes will be watching the Alios developments closely as it is potentially the next up and coming competition to Pharmasset, Roche, and Bristol Myers. In addition to any other applications VX-509 will have against other auto immune / inflammatory diseases.
I am also curious to find out what VRTX plans on doing with the nearly 12 billion in accumulated cash it will have near the end of 2015.
Poor Pharmasset will only have two years before competition starts nipping at their heels. That is the problem with only having one drug focus. At least they will likely make their R&D capital back... but not even in the same ball park of profitability as VRTX.
Which has always amazed me how the majority of people simply look at VRTX as a HCV play... while pricing in the complete success of drugs in other biotech co's pipeline.
VX-509, as I understand it, has applications for other inflammatory diseases as well. And I am not going to address any of the other applications VRTX has in its pipeline.
All of these conclusions assume all of the clinical studies for all companies are successful of course.
3 - 5 Billion seems very high to me. I'm optimistic, but not that optimistic. I've been thinking 2 - 3 Billion myself and based on reputable estimates I've seen.
Just thinking very, very crudely:
- Taking the middle of that (2.5 Billion) for a yearly revenue
- Just taking a wild guess at $40,000 / patient effective revenue (who knows... just ball-parking for the sake of argument)
- Therefore you need 62,500 new treatments a year
- Divided by 52 weeks = ~1,200 per week which it seems VRTX is already achieving
If investors were anticipating 5 Billion in 2012, 2013 or 2014 (certainly not past that due to competition), then yes I understand the selloff, because that won't happen on Incivek alone.
I will agree with you there.
Today was painful. I think it is just overall macro issues because in early August, we had Greek / Euro issues and fell from $53 to $40 in 7 days... and again... late September to now... same issues... same price range. Three nearly 25% swings in 60 days! That is market volatility.
The thing to keep in mind is that while the price has fallen, the stock itself is inherently more valuable than it was back in early August and significantly more valuable than it was when it priced at these levels in mid February. Which is why I am viewing this as a buying opportunity.
I personally am staying the course as my model is predicting 3.12 billion through 2012. I think very strongly that 3Q and 4Q earnings releases are going to set the trend for this stock and will adjust my opinion(s) as data comes forward.
For now... I am a strong buyer.
The prescriptions have not been growing, the stock has sold off.
I expected a fast ramp. These Hep C patients have been treated all along. It is just a matter of adding Incivek to the regimen. I simply think the market is bigger than the current prescription level. I was figuring 3-5 billion in the end.
According to 18 analysts... the EPS 60 days ago was supposed to be <$0.37>; 30 days ago it was <$0.20>; 7 days ago it was <$0.08>; and the current estimate is <$0.04>.
The data we have is considerably more bullish than what was expected, and continues to grow more bullish with every week. Which has resulted in the very dramatic and positive earnings change from a loss of 77 million to a loss of 8 million.
With data changing the consensus estimates, I have to ask then 'dorkbuster'.... What should the Rx's be then? How much more bullish in expectations are you compared to the 17/18 analysts that have been following this stock for some time?
How do you come to your expectation of higher Rx's?
Is it based on other drug launches specifically?
If so, what are they, or is this just your 'feel' on what should be?
And how does this compare to Merck's data? What should their prescriptions be?
Well according to your table, the "new's" have been flat for two months and the "total's" have been flat for a month. 4 point intraday selloff today on good volume and the same thing last Monday. Market doesn't help but they sold at the open even though the market was up briefly.
Many people on this board are spouting conspiracy theories and other nonsense but the answer is right here.
Glad I don't own this. They need to get those prescriptions up. I'm surprised they haven't actually.