To: cloudy1 who wrote (707 ) 7/13/1999 1:52:00 PM From: Cheeseburger Respond to
There will unfortunately be approx. 200,000 new cases of breast cancer diagnosed this year. Of those, approx. 50-60% or 100,000 -120,000 cases will probably be candidates for some form of combination chemotherapy involving doxorubicin (either in MBC, or the adjuvant setting). Let's assume 100,000 as our base. Now Abelcet (and its competitors) converted 15% of the amphotericin market in year one, 25-30% in year 2 and over 40% in year 3. Remember all the advantages that Evacet has over plain Doxorubicin compared to the one advantage Abelecet has over Amphotericin. Remember 1st line approval of Evacet over 2nd line for Abelcet. Remember the 3-10X premium of Evacet versus the 30-50X premium of Abelcet. Remember the primary outpatient setting of Evacet versus the primary in-patient setting for Abelcet (in-patient setting I believe has much greater cost constraints - see previous posts). Now with that all in mind, my very conservative estimates for Evacet are for an 8% conversion in year 1 (compared to 15% for Abelcet), a 16% conversion in year 2 (compared to 25-30% for Abelcet), and a 24% conversion in year 3 (compared to 40+% for the lipid-amphotercin products). That yields approx. 50 million of Evacet sales in year 1 ('00), 100 million of Evacet sales in year 2 ('01), and 150 million of Evacet sales in year 3 ('02). At 80% gross margins that yields 40 million in gross profits in year 1, 80 million in year 2, and 120 million in year 3. Now remember my zero sum model. ALL Gross profits of Evacet fall to the bottom line...... so we arrive at 40 million of NET profits in year 1, 80 million in year 2 , and 120 million in year 3. Coincidentally, that approximates a pretax EPS of $1/share in year one, $2/share in year two, and $3/year in year three.
