Mogn seems to be Ende's current favorite, or at least high on the list:
Aloxi sales data could indicate strong rebound
Aloxi NDC July sales data may signal a strong rebound, mostly due to highly
favorable reimbursement vs generic Zofran. Importantly, (1) Doctors make $48
per Aloxi dose vs. $2 for generic Zofran (2) Aloxi is the only 5HT3 being actively
promoted, and (3) we expect upside to Aloxi sales during 2H07. Also, MGI may
become an acquisition target. Reiterate BUY.
July sales data available August 25
NDC sales data for Aloxi in July will be released on Saturday, August 25 at 6 am
EST, and may signal a strong rebound vs 2Q. We expect Aloxi to regain share
primarily in the clinic and physician setting from generic Zofran. Also, changes in
quarterly purchasing incentives may result in smoother monthly sales trends.
$48 Aloxi profit vs $2 for generic Zofran
Aloxi profitability of $48 per dose vs. $2 for generic Zofran effective July 1 should
result in Aloxi regaining share previously lost to generic Zofran. Previously, Aloxi
lost share to generic Zofran due to a Medicare reimbursement anomaly resulting
in $84 profit per generic Zofran dose vs. $42 per Aloxi dose. However, effective
July 1, 2007, revised Medicare reimbursement reverses this trend, which should
immediately boost Aloxi sales during 3Q07.
Active Aloxi promotion should favor switching
Aloxi is currently only 5HT3 anti-emetic being actively promoted, which may
hasten share recovery from generic Zofran. In addition, Kytril and Anzemet may
also lose share to Aloxi due to minimal promotional activity.
Expect Aloxi upside during 2H07
Due to highly favorable reimbursement for Aloxi vs. generic Zofran, and active
Aloxi promotion vs. minimal efforts for all other 5HT3 drugs, we expect upside to
Aloxi sales estimates for 2H07. Although MGI has guided to a 20-25% increase in
Aloxi sales during 3Q, we estimate switching back to Aloxi may be faster than
expected, resulting in upside.
MGI may become an acquisition target
We believe MGI may become an acquisition target due to (1) likely Aloxi reacceleration
in 2H07, (2) continuing strong growth in Dacogen sales, (3) three
currently marketed oncology products, and (4) a management team that may be
more open to being acquired. |
