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Biotech / Medical : MGI Pharma MOGN New patents, anti cancer
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To: Russian Bear who wrote (695)2/19/1998 12:30:00 AM
From: Vector1  Read Replies (1) of 1826
 
<<Do you have a good sense of Salagen's potential revenues, and the timing involved in the ramp-up? Just how much revenue can they raise with a sales force that numbers twenty-something, and how soon can they begin to do it? >>

RB,
Good questions. Most people have never heard of Sjogren's and it is massively underdiagnosed. Now that MOGN has approval they will be able to advertise in medical journels and commence a campaign to educate. There are a few web sites of Sjogens groups and they too will be marketed. One of the keys will be getting on the Managed Care approved lists. This will take some time and could result in some price negotiation. Since there is basically no comp for Salagen and the price is already being covered for head and neck cancer I think the price will hold. Given their limited resourses to be conservative Ithink they can get to $50m in total Salagen sales in 3 years. At that level of sales GM should be close to 95% resulting in about $47m of gross margin dollars. Even after $30m of SG&a and RD that leaves about 10m of net income(I am assuming fully taxed earnins even though they have an NOL) Assuming a 20 multiple the stock should trade at about 15. If they sign a deal to help defer the costs of MGI 114 the stock will trade higher. If they have positive phase II results the sky is the limit.
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