<<SCIO>>
Well their original deal with Bayer had $20m upfront and another $40m on regulatory approval, followed by a co-promotion deal. Seems like a deal struck now would have similar or better terms.
Natrecor initially addresses a market of about a million cases a year (ER admissions for CHF). There are apparently about another 2 million cases where the patient is already hospitalized and develops CHF.
Pricing is still unclear to me. Nitroglycerin (the comparison in the trial) requires careful titration and close monitoring, and so is expensive in nursing time. Natrecor in the trial was pretty much fire and forget - may not even have to admit the patient overnight. So perhaps something of the order of $500 seems about right to me, but this is no more than a wild guess. This would mean a reasonable revenue target for the drug would be around $300m after a few years. That means a market cap of some $3 billion or more split between SCIO and their forthcoming partner (AMGN is about 20x sales, so $3 billion is fairly conservative).
SCIO currently has a market cap of around $750m, with about $75m in cash and marketable securities. They have a reasonable pipeline and recurring annual revenues of around $35m already.
Thus mid 20's in the near term (post NDA application and partnership) seems reasonable. From this point out they also become a good munch candidate (which might of course be viewed as a long-term negative).
Basically I don't think the Natrecor results are fully in the stock yet. It really did very well in the trial, which I think answered all the FDA concerns. Fewer side effects than nitro, quicker onset of action, somewhat better efficacy, and as I already mentioned, much less need for titration. (These are all patients already on dobutamine & diuretics).
Longer term, who knows. I don't have a good read of the P38 kinase program or the status of their other partnered drugs (Chiron for FGF, Kaken in Japan for Fiblast and the Novo Nordisk diabetes drug, amongst others).
Peter |
