It's better not to have to raise funds, but of all the ways to do it, a stock offering at about market price is the most favorable for a company's prospects. Unlike any sort of bond offering, nothing has to be paid back in the future. Unlike a rights offering, there is no persistent dilution threat. Unlike a preferred offering, No prior claim on cash flow is created. There's the immediate dilution hit, which is small when the offering is near market price, and then there's only the cash. It's extraordinary that a nascent drug company should get to raise money this way.
Likely that the next 2 catalysts will be the European milestone [any day] and the magic subset revelation [probably in a clinical trial design within 3 weeks]. Neither of these really has a chance to be better than anticipated, so they'll mainly stroke analysts' egos--the value of which should not be ignored.
Jakafi label revision MIGHT come in Q2 (or FDA might plausibly hold off to combine it with the expansion to cover PV, which strikes me as likely to happen in Q3). I don't think analysts really expect references to survival data to be allowed on the label, so if they are, there could be a little pop.
All those solid tumor combination trials can read at any time, especially with mid-trial evaluations for slaughter or futility. But nothing seems likely in the next six weeks.
It's been 7 months since the possibly associated case of PML. "Me too" letters usually appear within six, so we can exhale.
I think that's the one I listened to. Pretty ho-hum. Would you believe that HH has been working in the US for 20 years? He MUST have a coach to help him keep the accent. Analysts seemed more hopeful than I am about the solid tumor trials. The published abstract of the PaCa paper will reveal the magic subset; we won't have to wait for the presentation (It wasn't mentioned, but the next clinical trial design may reveal it even sooner) And no talk about Bari that I recall (except indirectly, in saying that a go-it-alone test of a JAK1 drug vs RA would use up money better spent advancing other programs). The second JAK1 drug is longer-acting than '110 (possibly the reason it's being pushed toward inflam indications)
I don't see it, but that's no surprise. The price seems a bit low--about $30K a year. I also don't find an announcement that the prior recommendation against using Jakavi has been altered. But if true, and if I understand the terms, this would be enough to trigger the milestone payment.
Well however it was done, Intermune now has enough cash to run a US introduction, prosecute approval of a new dosage form, take a scleroderma label extension to the point of FDA consideration and make a serious effort at getting Son of Pirfenidone into the clinic. Pretty much everything they want to do, they can do on their own. That means that they can be choosy about takeover offers. If you assume success on lung manifestations of scleroderma, that puts the target price well over $100.
But I'm afraid that the takeaway message for most of the people on this board is that the time frame for a possible takeover just got at least 6 months longer.
I'd never heard of Hy's law until 2 weeks ago. Basically, it says that drugs which cause abnormalities on certain liver function tests have a risk of causing complete liver failure. The law is empirical, but it has given enough correct alerts that violators routinely have extra liver safety monitoring added to clinical trials. Imetelstat clearly gives a Hy's law signal in a small number of patients, but that doesn't seem to be the issue today. Almost all patients treated with IM have signals in the liver enzymes of interest AT LEVELS BELOW WHAT WAS SEEN WHEN HY'S LAW WAS FORMULATED. There would have been liver monitoring anyway, but it's the universal occurrence of tiny signals that has FDA stopping everything they can until the situation is examined further.
In the long run, it may not be so big. Everyone sensible already knew that IM was too dangerous to use outside of situations with imminent risk of death; alternatives exhausted. Such situations DO arise in hematologic malignancies. FDA has basically told Geron to quit trying to expand the market and do some studies in appropriate situations. Trial design is going to be a bear, but better to take the hit now than to do a p2 study and come up with no acceptable dose for the anticipated usage. And you can charge a VERY high price in a final salvage situation.
The Geron flap has been good for our stock price. There may be blips connected with the present situation, but since Geron was never an actual business concern, the net price shouldn't be affected in the longer run.
Geron's president impresses me. He may be able to salvage the company yet again.
I'm surprised it has taken so long. It will be triggered by pricing of Jakavi in either The UK or Italy
(what has been said is 3 of the 5 major European markets; DE and FR have priced. UK had its usual rejection on initial consideration, but there has been enough time for reconsideration. Spain is effectively without a government). If we have to wait for Italy, it could be another 6 months. Because the back-royalty is contingent on total number of countries rather than which ones, it is just barely imaginable that it could kick in first.
The problem in The UK is that the statutory pricing guideline is so much per year of life extension, adjusted for quality of life, and with an idiotically low price for a year (about $100K if I recall). So no imaginable modern drug is approvable on its face. There Are Ways, but they work on reconsideration, not initial consideration.
I have to say. REALLY. "Good TJ can't be happy sharing a screen name with this (call it V2). Although I have to admit to being a bag holder when you come down to it. The contents of the bag, though, are worth about 4 times what they were worth when Good TJ started switching off with V2.
Someone showed me a list of companies bought for their [one or few] marketed drugs. Rule of thumb is that takeover value is around 5x peak annual sales. A fairly grudging estimate puts Esbriet at $1.5.bln peak. There may be a discount needed for short projected exclusivity in Europe, but still, $60 a share looks like a steal. I'd guess high, and I'd guess late. Management figures to be hoping for a sharp sales improvement to sweeten the offers. so no reason to close the bidding too soon. Fast progress on Son of Pirfenidone might stretch things out even longer (even A LOT longer).
Not clear that new financing will be needed. First, there may be a takeover before cash needs jump. But the other reason is more fun to speculate on: the spectacular ASCEND result may accelerate Esbriet adoption in places where it's already for sale. That storied $60MM sales quarter might happen soon enough to pay for a US rollout.
[zinger redacted] Intermune is the one company least likely to leak anything useful (something about house arrest). Suitors don't have anything TO leak (The only things that would be important would be an offer over $110, i.e. a preemptive bid (I'd love it, but people who do such things have their own reasons for tight security) or authoritative facts about the side effects in the BI study). We can take $60-ish offers and bankers working to finance going-it-alone as given.
As I've said before, there's a lot of uncertainty about how well Jakafi as a PV treatment will do in the market. So stock price response to progress toward label approval figures to be less enthusiastic than we're used to seeing with new drugs.
Come back AFTER there's been a proper p2 and a p3 has passed the mid-study futility analysis. Until then, you don't have a drug to talk about.
The settlement isn't as big a deal as the legal fees. I believe this ends the case entirely. Unfortunately, there's still a fight with Qualcomm ahead, and they are notoriously stubborn.
Ok, there's a theoretical possibility that FDA might not approve. But ASCEND really gave an incredible result, and the prior decision was close. Inevitable competition? IPF is as great an elephants' graveyard as Alzheimer's disease. What's hazy about revenue? Forecasts seem to have been accurate-to-conservative. Insiders sell. Way of the world. When you have penicillin (an effective drug...perhaps TOO strong an example), the previous disappointment and failure of lysozyme (arguably the first antibiotic; Flemings try before penicillin) is irrelevant.
Hy's law is a way to get an early warning. Pirfenidone has always been treated as if it carries a liver hazard. There3 is a comprehensive treatment registry that allows an upper limit to be set on liver risk, and it is unsurprisingly acceptable.
A lot of pharma analysts are used to looking at cancer drugs. Tumors shrink, the drug is widely adopted within the year and you can feel some satisfaction (sometimes, as with some tumor types treated with Avastin, subsequent analysis shows that the tumor shrinkage gave no benefit to the patients, but so what?). A problem we're fighting here is that IPF patients are sick. Give them pirfenidone and they stay sick. Either way, they get worse and then die. Nobody feels a whole lot of satisfaction, and drug usage doesn't expand like wildfire. But when you look closer, the patients treated with pirfenidone had N more months of mobility before they became bedridden (The peer-reviewed publication Management was protecting data for is likely to be our first official look at a serious estimate of N). And those extra months were added to total survival. Physicians notice. Drug use increases. Like it's doing in Europe right now.
So ther's the bull case, presented as a response to the bear case. What's not to like? I don't know how fast it should happen, but Intermune ought to be valued as the owner of a $1.5+ bln peak sales drug, and it isn't valued even close.
Historically, the bear case on Intermune has had these legs: pirfenidone doesn't work at all; if it does work, the benefit is not worth the "trouble" (expense, intrusiveness, side effects, etc) of taking it, the side effects are intolerable and anyway, there isn't enough REAL IPF to make a market. Oh!-and better drugs will be there early on.
Pirfenidone works. Add the ASCEND data set to existing data and that is clear. The benefit and trouble are hard to quantify, but over the last 4 years benefit estimates have been steadily increasing while trouble levels have lowered a bit (better management of side effects, more convenient dosage form expected). Absolute tolerability of side effects has a cultural component: Shionogi encountered the misfortune that The Japanese are less tolerant of indigestion than Europeans. Ascend results clearly show that the side effects are tolerable to a transatlantic subject population. The lowest defensible estimate of IPF prevalence in Intermune's territory is 170,000 (the patient association estimates over 300,000). At a treatment price over %50K/yr that is a big enough market. The only competitive drug that might be near approval is the BI one, and the best public information is that it is moderately inferior to pirfenidone. The new p3 enrolling suggests that marketing is several years off, at best.
So the classic bear case is demolished. There are some new elements: many otherwise-reasonable people are certain that the European introduction was disappointing. This is mostly because they believed the LIE that management had predicted $60MM of European sales in the first full quarter (I first saw it on Motley Fool, but it popped up EVERYWHERE). Management actually said that they hoped the introduction would track ahead of the acknowledged blockbuster Tracleer, which it did. The newest item is the single Hy's law (elevation of certain liver enzymes warns that a treatment is able to cause liver failure) case in ASCEND[more]