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Next week, Centocor will have a new competitor against ReoPro. They also want to do a spinoff of their diagnostic business. The investment banking side of that contributes to the stated opinions of sellside analysts. Regarding the RA potential of the product, the side effect profile is dramatically more of an issue than in the Crohn's disease application. For RA, a potential nondrug blockbuster could be the Prosorba column from Cypress Bioscience. It is my belief that the data of Avakine as an RA agent on a stand alone basis will be quite mixed, and that when used in combination with the current arsenal of drugs, the side effects will become extremely messy. The pricing of Cor Theraputic's Integrilin for angioplasty is extremely aggressive $173, and far below CNTO's price of $1350. Integrilin is starting to ship this week, and should seriously cut into ReoPro sales for angioplasty. For unstable angina, Merck has priced their product below the pricing of CNTO's ReoPro - $1050 per 3 day course of treatment vs. CNTO's price of $1350. What's it all mean? If you look at what CNTO paid for their acquisition, the competitive products about to cut into their bread and butter, and the low probability of success in treating RA, if I were long, I would sell into the strength of today's announcement. If I were short, I would do nothing, as there is substantial political bias (investment banking pressure) on the analysts recommending the stock. As usual, fundamentals can be different than what sell side analysts say. Being an event driven stock, they had an event today, and the difficulty between newsworth events is the reality of revenues and earnings. I suspect that the reality may be fundamentally different than the market cap. This will be fun. |
