From a GS report posted a few weeks ago by George, the predialysis market was $100M, or 20% of them total SHPT market for Cinacalcet:
>>5. FDA APPROVAL OF CINACALCET EXPECTED IN MARCH 2004
On November 15, 2003, Amgen announced that the FDA had granted priority review to Cinacalcet
for secondary hyperparathyroidism (SHPT) associated with renal disease, implying six- month
review time. Based on the filing date of September 8, 2003, an FDA decision may be reached in
March 2004. We estimate that Amgen will pay NPS a 10% royalty on net sales. Amgen will also
pay NPS $5-10MM in milestone fees on approval, depending on the scope of the approved
indication. There is no milestone fee for European approval. The market potential of cinacalcet in
SHPT could expand from $400MM to $500MM if predialysis is included.<<
Message 19797293
Today's action took -- well what do you know? -- ~$100 million off of the market cap. Except that at 10% royalty rate, the revenue impact on NPS is $10 million. Again, I hear, though I can't confirm, that Amgen got an approvable letter for predialysis population but will have to conduct trials.
>>Due to lack of
Medicare coverage of oral drugs until 2006, we have assumed gradual adoption with
sales of $9MM in 2004 and $135MM in 2005.<<
GS again, courtesy of George:
Message 19893313
The trials will be about done by the time Cinacalcet gains market momentum, anyhow. I don't think this hurts NPS too badly, and further downside due this little disappointment would be unwarranted, IMO. However, I'm a little more nervous about the upcoming PREOS results. Could the current market cap have some speculation that the human carcinogenicity data will be good enough to get a better label than Forteo? If so, and said data turns out not to be noticeably better than Forteo's, perhaps a bit more downside could result. Especially, since Jackson may have caused a bit of that speculation by saying he didn't think PREOS deserved that warning on its label.
Well, it's for all these reasons that I am hedged. Your take would be welcome.
Cheers, Tuck |
