Thanks. I had rejection at 2% chance. Lucky for me I was not wrong. There are at least a couple of ways to make a couple of bucks in these situations. One is if your stock goes up/down like 50% because the outcome is unsure. The other is if you are pretty certain that it is going one way. So the stock range turned out to be ~$25 to ~$29.50 from pre to post FDA. Going into the advisory meeting, I was thinking $24 to $31.50. Turned out the pre-meeting took the stock down to below $17. Closer to the decision I was thinking the range would be $25 to $30 which is pretty close to what is happening. I never moved off of my idea that this was a low risk FDA decision. For me the risk in the stock is sales not FDA.
I agree with IJ that the stock will now float around till we get closer to sales data.
I will repeat a couple of things that I have already posted.
Unless ACOR management is fibbing about development time, ACOR should have exclusivity and patent protection till 2018 using H-W extension. They MAY have one or two potential patents coming. Without anything else, the drug is protected till Jan 2017. The protection in the EU is 10 years. This is one reason why the stock did not take off with approval.
This is a complicated stock and it still is, but less so with the FDA approval.
Nerispirdine from Sanofi is still not in phase 3... yet.
ACOR is a takeover target.
If the drug works for you, the drug hits different parts of your body system. Different patients may get different sets of responses. If the drug doesn't work for you, you will know it.
Don't be fool that all drugs are all about marketing. This drug will not sell over time if it does not benefit the patients in some tangible way. Any decent size practice will have later stage patients that will benefit from the promise of this drug. Most if not 95% of Docs will try this drug. You just have to sit in the Doc's chair for a day or three and see these later stage patients coming into your office to understand why most would try this drug. Once it is prescribed, the drug benefits, if any, will get back to the docs quickly and spread that way along with word of mouth. This is better than any sort of managed marketing. For patients currently on compounded drug, the only real limiting factor is cost for switching. Once the drug hits the market, all the negative aspects of the drug will work to turn the compounded patients into thinking about using the approved drug over time. My guess is that ACOR will get ~50% of the existing compounded sales. Cost is a big issue in this economy but ACOR is out doing their thing re: helping with like copay, for instance. BUT cost is what will hold back the sales of this drug. I am guessing the price with be >= $9000 per year.
One reason BIIB and Teva are interested in ACOR is they understand the sticky nature of this type of drugs in the particular MS populations. MS progression is a terrible thing and rightly feared. For this patient population, it is one thing to try this drug and it does nothing so you drop it. But another if it was doing something and then later on, for whatever reasons, dropping the drug with disease progression or no disease improvement and no go to alternatives. Mentally progression is never far from the minds of the older patients but they rather not think about it and not "deal" with it which benefits ACOR in terms of more patients staying on the drug longer. In other words losing the benefits of the ACOR drug = possible progression .... no drug decision = no progression in the minds of some patients. This is one reason why this type of drug is sticky.
I think the "easy" money part is over, now comes the hard part. |
