Indication: Chronic hepatitis C
Product Life Cycle Status: Mature, widely sold, and distributed
Sales: The company reported worldwide sales of PegIntron of $143 million (down 18% y/y) in 4Q12. Full year sales declined 1% to $653 million. The Zacks Digest average for 4Q12 and 2012 was in line with the company s report.
$ in million
Est. Growth (12- 15)
Sorry, but I still haven't finished chewing over the NPV issues with you chaps, and now have had to time to review the 2012 10K and the latest 10KA.
badbilly: you take me to task for using the Zacks royalty schedules you provide in this thread, and not going back to the 10K. I found NOTHING equivalent in the latter (eg. on pp 9-10 or 33), ie. offering (likely) FUTURE payments. Please cite pp #s.
Finally, regarding frank10q's notes on competitors, I just want to draw to everyone's attention the section pp19-20 that begins "Our financial results are heavily dependent on the continued sales of PegIntron on which we receive royalties, and if revenues from these royalties or royalties from the sales other products materially decline, our results of operations and financial position could be materially harmed."
Are we QUITE SURE this is is just boilerplate risk-noting, and that the future stream of Pegintron Royalty Payments is not at SUBSTANTIAL RISK as to its SIZE? One wants to be SURE the NPV can NOW be reasonably estimated as somewhere between 3.00 and 3.50, so that the present PPS looks ridiculous on its face (after adding in the 1.60 soon forthcoming).
pj, regarding my PEGINTRON NPV, the referred to pages in the 10K give the 'historical' data (as we all know 10Ks don't offer predictions). The Zacks data gives a confirmation to the slope, in aggregate and is a prediction. This is what I have to offer.
I don't have a big problem with your analysis, other than to have pointed out that since Merck's actual sales must corresponded (in aggregate) to the Enzon 10K historical data, going forward (with the npv) my approach was to take into account the regional trending and expiration dates (given in the 10K) for my calculation.
For me, my or your, npv as given are adaquate, along with other prima facie evidence, that has come to light since, to declare that this stock is very very likely worth something north of $5.
I'm comfortable with my modest long position from a value point of view, and suspect that there is a good deal more on the table that is being held back.
Could a major insider vs outsider swindle be afoot? You bet, imo, this is were research is needed, and noise needs to be made. Before the bell tolls.
The major competitor for PegIntron is pegasys, which came out in 2002. Now it has been ten years. Although the battle has not been settled, there shouldn't be any big change of the market share. Moreover, Peglintron has been around for a long time, so a recall is highly unlikely. Last, it takes time for new drugs to invade the market,unless the new drug is significantly better than the old ones. So imo, the Peglntron sales has a good chance to stay stable for the next couple years, and that's all we need.
badbilly: no quibbling, but would be most grateful for one or two clarifications, as the formatting is a bit confusing:
. these are Merck's gross receipts, yes? So what is the royalty % for Enzon? Eg. 652.5m Actual for 2012 leads to $____m for Enzon?
.What is meant by Est. Growth (12- 15) ?
. What is meant by -9.4%? Is this the rate of decay of the Merck revenues per annum?
If you could just post the expected revenue stream to Enzon, then we can dream up our own estimates for COGS and a discount rate later. Again, thanks...
pj Yes, gross reciepts WW, in aggregate ~6% apparently, $38.5m (per the 10K there are various caviates region by region). If you haven't looked at the 2012 10K, take a look (pgs 9-10 and 33). The trending in the Zacks projections and mine (see my previous PEGINTRON NPV topical post, and various replys) are in good agreement. The -9.5% is what Zacks projects the 2012-2015 y/oy growth/(decline) will be.
(BTW the Zacks report is online, google some of the key words it'll come up.)
hope that answers your query
Let me help out those not able to understand what this (current) forecast data means:
It substantiates the contention that a $4.70 stock is now on sale for $3.30!
Those able to quibble, please do.