Steven:
Thanks for conference call number. I listen two times to be sure that I'm not missing something. I can tell you that NXTR CEO sound very optimistic on company future grow for several reasons. I can add few things to Hong-Lee update:
1. 1 M AmBisome (AB) from Fujisawa is characterized as strong lunch of drug. NXTR already booked another order in 4Q and one more in 1Q/98. I am expecting one more in 1Q-2Q/98. This is translated to 12-16 M of AB retail sale for next two Q which for NXTR (~35% of gross sale) is 4.2-5.6 M. Fujisawa committed significant resource for AB promotion (retrospective analysis of comparable clinical trials, post marketing clinical trials which will compare treatment cost for AB versus Ampho. B, education programs,..). They are expecting significant exponential sales grow in 2, 3 and 4Q with US market penetration similar one AB have world-wide (~80%).
2. With additional AB clinical trials data and journal article on AB (March/April 98) will help promotion not only in US but world-wide (specially EU) also. AB had 60-70% grow in far East and Mediterranean market last few Q and they expect further penetration and grow. I will say that +100 M 98 world-wide sale is bit conservative (France approval, similar one to US, and EU penetration for FUO indication will add more than 20% to 97 sales number), IMO.
3. DaunoXome (DX) additional clinical trials for refractory leukemia and NHL will be completed by year-end and data presented in conference. They expect, at least in EU, slightly sales grow. I will say that 98 sale will be ~8 M. NXTR do not anticipate any further clinical trials and they are significantly reducing further development of DX.
4. MiKasome (MK) is NXTR main focus (in next two-four years) and they see great opportunity in antibiotic market. Favorable MK pharmacokinetic, no toxicity associated with aminoglycosides, and early sign of antibiotic activity (partial P I data) in refractory and terminal ill MOC and TB patients, are more than anyone could expect for PI. They will test MK at dose of 15-20 mg/kg (this dose did not show any toxicity in PI and it's three time dose they reported in last press news) once a day every one week in several PII trials, starting with kidney infection (start in next two/three weeks) and three additional ( Hospital pneumonia, TB, and MOC) during first half 98. They are expecting completion of the first PII by 98 year-end, and if possible start of pivotal PIII in 4Q98/1Q99. This is very aggressive approach, which can bring MK in market by 2000.
5. SELEX: NXTR has restructured its R&D. Their attention are to have flat R&D expenditure in next two years. They are in process for licensing one aptamer (probably in 1Q 98) with possibility to bring home ~10 M (from few aptamers licenses in 98) in addition to 2.6 M from SP. After several years of the extensive research on SELEX technology, it is time to move promising drugs in to clinical development. Now, IMO, their focus is on paralel-SELEX which can generate small molecules/aptamers inhibitors.
6. PARS: NXTR had revenue in 3Q (~400K) from custom manufacturing and they expect ~3M in 98 from this technology. Currently they are doing monomers (nucleotides) manufacturing, but they are expecting expansion to oligonucleotide field as well.
All in all, 98 profitability is very possible. Expectation are at ~0.60 EPS, but this can be conservative. Because of the this overall picture, it is hard to explain recent deep (based on lower EPS grow?).
I will not hide that NXTR, after ISIP and REGN, is my larger holding and that I have vested interest. I am still very optimistic on NXTR future performance. Hope other share my view.
Also, will appreciate any argument/opposition opinion. Am I missing something?
mz |
