James,
Here is the gist of it ..
... Synvisc's price tag not decided...comparable to Fidia's product
which costs $495 per treatment. Synvisc sells for $350 in Canada.
Assuming Biomatrix sells Synvisc to its distributors for $30 a
syringe, sales could reach $100 million in 1999.
Bogner expects Biomatrix to earn its first operating profit by the
4th quarter. He sees 97 earnings of $2.05 a shares.
Thats the gist of the whole article.
That's the story ... here's the implied math:
(1) User Population:16,000,000 People
(2) Est. '99 syringes: $100,000,000/$30 = 3,333,333 syringe shots
(3) Implied full time users: 3,333,333/6 = 555,555 People
[6 shots a year per user]
(4) % of Population: 555,555/16,000,000 = 3.5% of User Population
I think it is too early to call any of this out.
I view it this way:
This year:
(1) AHP owes BIOX $19.0 million not $12.0 million.
That's $1.72 EPS @ 11,000,000 shares and no taxes.
It EXCLUDES payments still due from BI and Bayer.
They have $0.34 in the door already i.e June YTD.
(2) More importantly, Bayer Corp is in a BAD POSITION.
If they jump in now, it will probably cost them
$25.0 to $35.0 million to get the rights to China.
If they wait, and the RUN RATE of product usage in
the USA is significant, i.e. the product works,
people like it, and they take it twice a year:
The $ BIOX will ask of Bayer for distribution rights
will double.
Next year:
(1) Next year's sales will consist of:
(a) Pipeline
(b) 2nd time users
This will muck up the true sales picture.
(2) I think BIOX will have 250,000 WALK-INS. By that I mean,
AHP doesn't have to do anything - the people will come
to the product. After that it is up to the product.
(3) If you go back to the tape, last year's FDA Advisory Panel
meeting was UGLY. There was talk about limiting Synvisc to
only people who had NEVER tried steriods.
(4) For reasons unclear to me, the final FDA ruling did not
put any restrictions on the products usage.
(5) Off label use:People with high incomes and sore knees will
try this product at least once.
Again, the results of this are up to the product. But if it
works well, the 3.5% usage rate listed above becomes
meaningless.
I tired. Gotta go. HTH.
Regards,
John McCarthy |
