ALKS
Summary Thoughts Following
Recent Roadshow
Heavy Emphasis On Vivitrol
Investor questions centered on Vivitrol (once monthly naltrexone) given the
pending PDUFA date, and the importance of the drug for ALKS’s near to medium
term profitability. We have reviewed the highlights.
PDUFA Date On April 16
We believe the most likely outcome is an approval, allowing a launch during
Q2/C06. ALKS's stock price has weakened, partly due to a weaker NASDAQ
Biotechnology index, investor jitters leading up to the PDUFA date, and increased
scrutiny on the potential adoption of Vivitrol. Despite the potential for near term
volatility, we believe ALKS is well positioned to emerge as a profitable biotech
company, with a strong balance sheet ($319 mm in cash, and $278 mm in
convertible debt), and a robust pipeline (AIR-Insulin and Byetta LAR in phase III).
Black Box Warning And Use in Women
Revia (once daily oral naltrexone) has a black box warning for “dose dependent
hepatocellular toxicity”. Given the recent history of drugs with safety issues, we
believe that Vivitrol's label will continue to have a similar black box warning. We
are cautiously projecting approval for use by both men and women, although the
label may refer to the lack of efficacy in clinical studies to date in women.
Targeting Specialists With Premium Priced Product
We are projecting premium pricing for Vivitrol ($15-$20/day), and a modest
penetration to achieve our estimates. We believe that CEPH and ALKS will
initially target high prescribing addiction medicine specialists (1,000-1,500 in the
US). Adoption by these thought leaders could facilitate adoption among larger
segments of physicians, including psychiatrists. |
