How often does the CHMP meet - they said in the latest earnings call they did not expect a CHMP review until "late this year or early 2016", so is this really a delay?
I found it strange that in the statement recapping the safety profile they noted there have been no pulmonary embolisms - is that an AE that has occurred with Drisa or some other RNAi drugs?
Have you read any analysis of the BMRN's prospects for approval that speaks to the quality of any of their data? Everything I have seen is just platitudes about BMRN's expertise in the rare disease space, the political pressure on the FDA to approve something and the perceived advantage of BMRN having their drug reviewed two months earlier. Show me one analyst that points to the core efficacy data that will sway the AdCom panel, let alone the FDA. The analysts that asked the tough questions on BMRN's last earnings call were dismissed - in BMRN's view dystrophin production evidence is not important, the failure of the Phase III trial can be rationalized with excuses about the lack of expertise of the clinicians that administered the trial, and safety issues are manageable and "seldom" lead to discontinuations. They are left with a small subset of boys under 7 that supposedly benefited in the 6MWT for a short period of time, when the historical evidence of the same group shows that boys are just as likely to improve as decline at that age. Show me any analyst opinion that is backed up by a robust review of the data that BMRN has publicly disclosed?
The key to valuing this going forward is to guess what the final share count will be by the time the bleeding stops - hopefully it will be less than 500 million shares? Even at that number, the market cap is only $10M - you would think the technology is worth at least $50M+, depending on how much needs to be invested to get it past the FDA?
They're in the dilution trap - until they have the capital to get them to self-supporting/breakeven operations, buyers will sit on the sidelines - in the absence of buyers, sellers have to take what the bottom-feeders will offer.
Pricing is never an issue addressed by an AdCom - their only directive is to determine whether the clinical evidence at hand is sufficient to support that the drug is effective and safe - separate votes are taken on each. No doubt, their vote can be influenced by the severity of the disease and the availability of other treatments - the whole risk-reward context that the parent groups have pushed to make part of the equation. Pricing isn't even an issue the FDA can consider in its deliberations on whether to approve a drug, so the idea that a pricing "pledge" may come into play is ridiculous.
speed - when it comes to dystrophin and the 6MWT, there will never be a tight correlation of one measure to the other. This issue should have been put to rest by now - CG tried to nip it in the bud, but some analysts keep resurrecting it and EK is too nice to put them in their place. You are taking what is generally agreed to be an imprecise measure (% of dystrophin positive fibers) from a different location on the body and trying to correlate that to a performance measure of muscles in a completely different location and that is not even the biggest problem - the performance of the patients leg muscles is primarily influenced by the degree to which the muscle has already been destroyed by the disease - something that is impossible to measure accurately. There is so much "noise" in each measurement that any effort to correlate the two is foolhardy. The ultimate clinical proof of Etep will be confirmed when the younger boys make it past their teens still on their feet and the older boys continue to breathe and use their arms into their twenties - that evidence is a good decade away.
grey - I think the docs will be reluctant to accept the portrayal of any of the clinical data as statistically significant (Drisa, because it is ad-hoc, cherry-picked and Etep because of the small N against historical controls), except for the dystrophin production - 100% of the boys tested positive for dystrophin production post-treatment - no qualifications or analysis required. You don't need to understand the historical characteristics of boys 7 w 6MWT between x and y to accept those results and it proves the drug is working as intended - correcting the deficiency that is the cause of the disease.
Ultimately, it depends on the label and what clinical evidence is allowed/required to be included with the label. If the Etep label includes the dystrophin production data (while Drisa has no conclusive/consistent data), then it will be a slam dunk for Etep. No doctor is going to be convinced by the 6MWT data for either drug - but the combined safety and dystrophin evidence gives Etep a clear advantage. Beyond that - I think doctors will understand the idea of 5-times the dose with no side effects - how will BMRN counter that equation?
An analyst challenged them on the call that in order to be cash flow breakeven based on current spending rates, they would need $20M of Omidria sales per quarter and they confirmed that was the target number for mid-2016.
t_c16 - "Many new drugs start at $100M or more per quarter" - what are you smoking? Perhaps a rare disease drug or cancer drug with a $100K per year price tag have launched with numbers in the $100M range, but a drug that has a $500 price tag - show us the history on that. It is baffling to me how a drug that is cash flow positive after a couple of quarters (i.e. covering all costs of manufacturing and marketing) is maligned? This is a low cost drug that you can't build a major sales force around - penetrating the market with less than 50 sale reps will take time, but it is the right path, as it will produce profitability (for the company as a whole) the quickest.
The FDA doesn't need the courage to reject Drisa - they can use the AdCom as the fall guy. Given the FDA's cluelessness over numerous issues regarding DMD and the trial results, they need outside expertise to guide them.
The AdComs were never going to be "combined" - they were just originally scheduled to be back-to-back on separate days. This scheduling was not intended to facilitate some sort of comparison between the drugs, but to simply provide the AdCom members a more efficient travel schedule. Each drug's AdCom will be restricted to the data for that drug - while the AdCom members may have an opinion of which drug is better, that does not come into play in determining whether either drug is worthy of approval. Practically, the only impact the separation of the AdCom dates has is providing another two months of ridiculous speculation on how the outcome of the Drisa AdCom will impact the outcome of the Etep AdCom.
Total Omidria revenue on a reported basis for the last two quarters was $6.3M ($3.1M +$3.2M), but the amount shipped from distributors increased 71% between the two quarters, so that means the "sell through" sales were ~$2.3M in Q2 and ~$4.0M in Q3. They also reported that sell through orders increased 43% from Sep to Oct, so orders are accelerating. Assume sequential monthly sales in Q3 were $1.0M-$1.3M-$1.7M, then Oct sales would be $2.4M, so they are a growth path that would get them to $9M-$10M in sales in Q4 - not bad. No doubt, these are short of original analyst estimates, but you have to wonder what some of these analysts were smoking when they came up with those projections?
Assuming the growth rate will continue at 70% may be aggressive, but for the first time the CEO went out on a limb and forecasted that the company will be breakeven on a cash flow basis by "mid-year 2016". To be conservative, you should probably assume that on a quarterly basis, they won't be fully breakeven until Q3, but as one analyst confirmed on the call, that will translate into quarterly sales of roughly $20M, so with continued growth by the end of 2016 they will have annualized sales of $100M. The bashers will find a way to dismiss this quarter and the future prospects of Omidria, but to go from nothing to an annualized rate of $100M in 18 months is pretty damn good, especially for a product that is priced in the $500 range. Even with potential pricing pressures going forward, there is still plenty of market share left to capture - 3-5 years down the road, Omidria could be bringing in $500M in annual revenues.
What you will hear is the CEO encouraging you to listen to or watch the RDNA Advisory Committee (RAC) presentation and discussion of the studies they have done to support the IND for their hemophilia B therapy. A lot of the technical stuff is difficult to understand, but what comes through is how impressed the committee is with the quality of the work and the performance of the therapy in avoiding any "off target" issues.
thig - I think he was being too generous/politically correct when he said a Dirsa approval would be "good" for SRPT (because they both have the same mechanism of action) and patients should have a choice. I think this is what led to the weakness yesterday - some may have interpreted these statements that he believes Drisa will be approved. While I don't believe the decision on Drisa should have any impact on the Etep decision or success in the market, many investors and "analysts" obviously don't feel that way.
It is baffling to me how while many of the "analysts" will acknowledge the clear safety difference in the drugs (a 1st grader could make that call), very few will even address efficacy in terms of dystrophin production. The same analysts who dismiss Etep because there is no measurable clinical difference between the 30mg and 50mg arms, won't even acknowledge that Etep's dose is 5-times that of Drisa's or that Drisa has no corroborated evidence that it produces dystrophin - its supposed MOA.
Ed obviously hinted at these distinctions on the call, but I think he should have been more forceful - the clinical evidence doesn't really leave a "choice" - only a moron would choose Drisa over Etep.
After I posted, I checked the proxy statement to see what they are paying these hacks - the former CFO "resigned" on March 31, 2014 and received $500K of total compensation for the year - her severance was close to $400K - unbelievable how these companies waste shareholder funds.
What a disaster - the IPO in early 2013 was at $10 and then they did a secondary later in 2013 at $14 - two years later they are selling shares for 70% less - yikes. Is the ignorance thinking that $14 wasn't that great a price and so if they need money down the road, they'll be able to sell at a higher price or is the ignorance not being able to accurately project what your cash needs will be in order to become breakeven/self-sustaining? Either way, they should be taking pay cuts and no bonuses until they reach profitability.