Davy Irish stockbroker view 4.17.09. Hope they're right, looks like a pretty reasonable sizing up.
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Although Tysabri Q1 revenues of $227m were marginally below our forecast
($236m), BIIB provided encouraging signals that its renewed sales efforts may
already be showing signs of accelerating enrolment. Firstly, overall net additions
ran at 169/week in Q1, stable compared to Q4 (177/week). However, BIIB also
revealed that there was an uptick as the quarter progressed – March was the
highest of the past five months with new additions accelerating and discontinuations
beginning to normalise. Sales efforts, refocused on efficacy andPML education, may be paying off.
This is positive for Elan. Any re-acceleration in enrolment above the 180-200/week
level can provide significant upside to our EBITDA forecasts given the operating
leverage in the Tysabri model.
The reason for the lower-than-expected Q1 out-turn was related to US revenues.
Average per patient revenues declined by 2% quarter-on-quarter due to two
factors: increased numbers of patients seeking free/discounted product and a
modest decline in doses/patient. The former relates to economic conditions (BIIB
said it had a revenue impact of circa 1% across all products), and the latter likely
relates to some drug holidays. Thus US revenues grew year-on-year by 35% to
$116m, while patient numbers advanced by 36%. International sales grew by 52%
to $111m. If persistent, this would provide some drag on revenue growth allowed
through increased enrolment.
Other points in the conference call were as follows:
- The high titre production process should add a point or two to gross margins but
probably from 2010 onwards.
- There will be 14 company-sponsored posters and presentations at AAN regarding
Tysabri, including post-hoc analysis on Phase III data, updated safety data and an
imaging poster exploring the idea that Tysabri may promote remyelination in MS
patients.
Elan will release its own Q1 results on April 22nd. Please see our preview note,
released April 15th, for further detail.
rte.ie |
