Assuming a peak sales of 1 billion USD, given at least a 12-year marketing exclusivity, the value of plecanatide would be at least 3 billion USD, with industry-standard price-to-sales multiples. As a small company, SGYP will need to partner with a larger pharma to sell the drug. Assuming SGYP receives half of the economic value of plecanatide, this would translate into 1.5 billion USD of value for SGYP. Consistently, the competitor, Ironwood Pharmaceuticals has a market cap of 1.6 billion USD, in agreement with our valuation of SGYP.
To assess the potential upside and downside of SGYP, we look at the likely stock price with the success and failure of the upcoming Phase 3 trial. If successful, a 1.5 billion USD would translate to around $7.5, a 100% increase from the current price. If the trial fails, the drug will likely only be marketed in CIC patients. The market potential of CIC alone is difficult to assess, but let's assume that the stock will drop by 50%.
The upside to downside ratio is 2:1. The likelihood of success to failure is at least 3:1 given the proven efficacy in prior Phase 2 trials and the two-shots-on-goal Phase 3 trial design. Overall, the benefit to risk ratio is at least 6:1, which makes SGYP a superb stock at its current price. Despite the recent retreat in the broader biopharma sector, SGYP will prove to be a star in Q3 2016.
As of Q1 2016, SGYP has 84MM of cash and cash equivalents, against liabilities of 95MM. In May 2016, the company raised 90MM via a secondary offering at $3/share (press release). The quarterly burn rate is around 20-30 million. Current cash will last for at least one year, way past the anticipated catalyst in Q3 2016.
as of today
The CIC results on CSBM's and reduced bloating should point to stellar results at IBS phase 3's. It would be nice to see them on-time with the results in July, they were already moved back. It's not a popular opinion, but there has been dilution, I bought more down here, I would pixx my pants for 10 tomorrow
I was wrong. Primary is CSBM, which was great in CIC. In CIC, it also reduced bloating, which should lead to less abdominal pain, which is the other endpoint for IBS. Should portend to great IBS results in august
like how good the poop looks, stool conbsistency
anyone got a read on this?
Just met with a GI today who saw your booth at the ACG in Las Vegas. He asked, "The Amitiza booth didn't have much information about why women had to take a pregnancy test before starting on Amitiza. He also didn't understand why it was his job to make sure she was still on contraceptives." He was surprised to learn that Amitiza caused abortions in guinea pigs and that was the reason for this safety precaution. He was even more surprised when he found out that Amitiza is a prostaglandin. Just imagine if a patient's unborn child was aborted due to this prostaglandin drug and the patient never knew it! Would you want to take that chance?" He responded that he couldn't believe the FDA would approve a drug that dangerous. Good luck selling the rat poison!
and it's percentages, so you can forget ratios, as well as number of subjects, etc as excuses
wait, here's the numbers:
Importantly, tolerability data appear to favor plecanatide over Linzess. Discontinuation due rates due to an adverse event were 5.1% and 5.0% in the 3 mg and 6 mg treatment groups, respectively, versus 1.3% in placebo-treated patients; 2.7% and 2.4% of patients in the 3 mg and 6 mg arms discontinued due to diarrhea versus 0.4% of placebo-treated patients. By comparison, in Ironwood’s CIC trials, 8% of Linzess-treated patients discontinued prematurely due to adverse events versus 4% of placebo-treated patients, with 5% withdrawing due to diarrhea, versus 1% of placebo-treated patients.
So, 1/2 the withdrawal rate for plec due to the poops
discontinuations due to diarrhea were 2.7% in 3 mg and 2.6% in 6 mg dose groups compared to 0.4% in the placebo group.
No matter how they want to pay to have the poop ratio measured
here and on twits. They don't spout on Tuesday, but come up with their scare tactics on ddw weekend