>>What do you think the net income from Nori would be if SEPR were to market it on their own ? <<
My guess is that it would be small in big pharma terms, but significant in SEPR terms. A couple of numbers from the CC, from memory: $500 million in marketing to establish a billion dollar branded drug; $100 annual advertising expense for Claritin. There's no way SEPR can match those numbers without a partner. So, no direct marketing to the consumer. Also, SEPR's sales force is geared to handle specialists at the hospital, not the general physician community. That's why it can be so small (50 compared to several thousand) and still be effective, at least for a drug used in a hospital setting like Xopenex nebulizer. So, without a partner, it seems to me that Nori would only be sold to ER docs and some other specialists, who in turn treat only seriously ill people, who really need a good drug. If Hismanal sells $50 million without being actively marketed any longer, that seems a reasonable estimate for Nori, despite the drug's merits. With 25% margins and 40 million shares, that would be 25 cents a share.
All of which implies there's little doubt SEPR will find another marketing partner for this one. Once-a-day, fast-acting, nonsedating--someone should be able to make a half billion dollar drug out of that. As Janet the allergist said, Claritin is not all that great a product. (DCL, on the other hand, might be). Allegra--not quite from a standing start, since physicians know the connection to Seldane--has $500 million in sales already. That should be worth quite a bit more to SEPR, even after deducting JNJ's share of the royalty. If JNJ and SEPR split 10%, that would be about 62 cents a share, based on 40 million shares.
But again, the key for me is whether or not you think SEPR will bring enough of its potential products to market to become a profitable, mid-sized pharma concern. Favorites will stumble, dark horses will emerge, but at the end of the day, will the company succeed in commercialising their IP? If they will, which I believe, the stock still has quite a way to go before reaching the market cap of comparable companies. |
