The early approval changes things a bit, but perhaps Harr feels this is priced in. From a recent GS report:
>>For 2004, we have introduced our loss estimate of $0.75. We assume that Velcade will be launched in early 2004 to generate revenues of $88MM.<<
I would guess Harr and others made similar assumptions. But MLNM has said they can ship Velcade in, what was it, a week or two? I think some upward revisions must be made to the revenue models, and that means the burn will be offset somewhat. Further, I agree with MZ that oncologists will try this off-label in other hematologic cancers. Might they even try it in solid tumors, if ASCO data looks promising? OK, that's probably a stretch. MLNM has said that a partnership (presumably for markets MLNM itself cannot serve, i.e. foreign) deal would be signed in 2Q03. Why is Harr so anxious to make a call in front of this deal, since the approval comes before the deal rather than vice versa, strengthening MLNM's position? I think that may more than make up for the delay (Harr and others expected it in Q1).
The time to make a call is after the deal and ASCO, IMO. After that, not much happens until the fall, when the Bayer deal, representing a large chunk of revenue, either goes on or doesn't. Until then, the stock would be left to flutter in the news vacuum during summer biotech blues.
I'd love to see the entirety of his report.
Cheers, Tuck |
