Here's the link
The market cap is $360MM with $136MM in cash for an enterprise value of $224MM. This is amazingly under valued for a company now with two FDA approved products. Tasimelteon has been derisked clinically. Look at the comps for other biotechs. They have only 3 analysts covering them. I think it is just under appreciated. Investors are waiting until pricing and will then be able to figure out the market. This allows for short sellers to be in control in the near term. It makes sense to buy BEFORE this is announced. This is a real disorder where doctors and the FDA believe this is a clinically significant medication. The stock is bottoming because valuation at this level will provide support. Since most biotech and spec pharma stocks trade at 3x peak sales, Vanda is trading as if they will only do about $100MM peak. BUT with 35MM shares outstanding that would work out to $0.70 in earnings power. This is the worst case and using a 20x P/E on that would imply $14 for a price target. So if the drug completely flops you are still looking at $14 per share in 12-18 months. And if I am correct, then sales could be much higher approaching $500MM peak... You want to own the stock before everyone else figures this out. You are welcome. :)
The best example I have is Xyrem, Jaxx pharma's drug for narcolepsy. I believe the price of that one is $75,000. It's a $500MM drug. Seems like a reasonable proxy.
And if they do $200MM and a typical valuation for an approved product in this space is 3x sales then you get to $600MM in market cap and then they have another $4 per share in cash. So with your own numbers the stock appears undervalued. Just saying.
Get real in what way. Those are the numbers. In order to calculate $500MM as you cite the market size you would need to know the price. Do you have knowledge of what Vanda will price the drug at? Actual numbers are coming in a couple of months when they launch.
non-24 is not only a quality of life issue but there are data that people who do shift work die younger thought to be due to the effect of a chronically altered sleep pattern.
The company stated on the call they expect to price similar to other orphan drugs. $50,000 actually would be at the low end of the spectrum for orphan drug prices which can range into the $300,000 vicinity.
It's possible also that they get greater than 25% share. Or that they price it higher. Either way I think current sales estimates do not reflect the market oppy. This will rise over time if rollout is going well. Also I would imagine analysts are going to pound the table after the call today. Well at least Josh Shimmer at Piper who should be taking a victory lap because he was absolutely right about this being an approvable drug in the face of many skeptics. He's awesome.
Apparently this happened with Jazz and Xyrem. Investors took a while to believe. Xyrem is now a $500MM drug or greater I think.
Let's do some math.
Given that they will likely price it at $50-100k in line - and actually below - other orphan drugs and that the market is 80,000 people. Then to get to a sales figure lets say they get 25% market share of 80,000 blind patients and price the drug at $50,000. That equals $1B in sales. That could be a reasonable estimate for peak sales.
I would buy more if I could!
I think that 12-18 months this will prove to have been an amazing buying opportunity. Tasimelteon now derisked clinically and approved. Market is large enough. Look at AEGR with 3,000 pts WW and a $2B market cap.
More from the call...
--company plans to hire a small sales force that should be adequate, 35 people
--awareness campaign will intensify -- 80,000 patients actually is a true number and they want to reach them via the radio advertisements
--also want to raise awareness to general public as well
--company sees itself as educator of the public regarding non-24 disorder