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Biotech / Medical : Sepracor-Looks very promising
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To: rkrw who wrote (7320)1/23/2004 8:57:47 AM
From: Icebrg  Read Replies (2) of 10280
 
>>By my quick count sepr has spent $1.1B in r&d since 1998 with no drug approvals.>>

You make it sound as if the money invested in research and development has not been yielding anything at all. But with ESTORRA approval (hopefully) coming up relatively soon and Xopenex MDI about to be filed, that is not the case.

If we allow for a valuation of 4 times the expected turnover, which I don't think is too generous, the two new products will have to generate a yearly revenue of 275 mUSD to "motivate" the amounts spent on R&D over the past five years.

As I believe that the revenue will be higher than that, that the the factor of 4 may well be too low and considering that the pipeline is far from empty, I believe it is too early to declare the efforts over the last five years a failure.

If both drugs fail at the gates of FDA, I will reconsider.

>>This is for an ICE strategy!>>

I don't believe that the choice of the ICE strategy automatically should lead to lower R&D costs. The main reason, as I see it, for the size of these costs has more to do with the indications that the company has chosen to pursue. These have required large-scale and extensive clinical programs. That is where most of the funds have been spent. And those costs would have been there even if the company had employed another discovery strategy.

Erik
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