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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: rkrw who wrote (5765)	2/27/2002 6:37:34 PM
From: software salesperson	Read Replies (3) \| Respond to of 52153

The psoriasis(P) / psoriatic arthritis( PA) market has been thought by some analysts to approach $ 2-3 billion in 2006. The main premises in the arguments are : (I) there is a homogenous 500,000 US moderate/severe patient population (II) the current patient population either (a) has given up on treatment altogether, (b) refuses to travel to a physician’s office for PUVA or UVB lightbox treatment or (c) is taking mtx or cyclosporine (estimated to be 100,000 patients) (III) the 100,000 mtx/cyclosporine patients will immediately switch to the new biologics because the latter are safer However, each of these premises is either false, unsubstantiated or arguable. (I) there is a homogenous 500,000 US moderate/severe patient population the current patient population can be characterized most accurately(and most simplistically) as being comprised of 6 potential market segments: (i) most severe P with most severe PA these are debilitated patients who have no choice but to adopt a new therapy solution: enbrel (ii) most severe P without PA these are debilitated patients who have no choice but to adopt a new therapy solution: enbrel + new biologics (iii) severe P with severe PA I believe that many of these patients have a choice , although it can certainly be argued that they have no choice either. If they have a choice, they will be weighing the side effect profile/mode of administration of the new therapies vs. their current treatments solution: enbrel (iv) severe P without PA I believe that many of these patients have a choice , although it can certainly be argued that they have no choice either. If they have a choice, they will be weighing the side effect profile/mode of administration of the new therapies. solution: enbrel + new biologics It is important to recognize that while the current estimate of the PA patient population is between 10-30% of the P patient population, it is believed that at least 30-50% of the most severe/severe P population has PA. (v) moderate P with moderate PA this patient population has a choice which will be based on the assessment of the side effect profiles/mode of administration of the new therapies vs. their current treatments many of these patients treat their PA with nsaids and cox-2 inhibitors. also, 60% of the overall P population ( many of which are in this segment) are currently treating their P quite successfully with a combination of dovonex, home or physician’s office light therapy, ointments, creams ,etc. although individual cases vary, by and large, if someone has a moderate case of both P and PA, PA is the more pressing problem. solution: enbrel + new biologics (vi) moderate P without PA this patient population has a choice which will be based on the assessment of the side effect profiles/mode of administration of the new therapies vs. their current treatments 60% of the overall P population ( many of which are in this segment) are currently treating their P quite successfully with a combination of dovonex, home or physician’s office light therapy, ointments, creams ,etc. this segment is the largest patient population in the overall target market. I believe it to be much more limited than currently believed because of the aforementioned alternative non-biologic based treatment options, as well as the side effect profiles/mode of administration of many of the new biologics. For the aggressive sales forecasts to be achieved, especially by solutions other than enbrel, this segment must contribute the major portion of the revenue. solution: enbrel + new biologics Thus , it is easy to see that enbrel has a significant advantage over the new biologics since it (a) competes alone in the PA segments and (b) has a more highly proven safety record (across greater than 80,000 patients) than the new biologics . Moreover, if I am correct that the moderate P without PA patient population need not adopt any biologic and will cautiously assess their side effect profiles over time, the potential level playing field in which all the biologic solutions will most aggressively compete is dramatically smaller than previously believed by most analysts. (II) the current patient population either (a) has given up on treatment altogether, (b) refuses to travel to a physician’s office for PUVA or UVB lightbox treatment or (c) is taking mtx or cyclosporine (estimated to be 100,000 patients) As previously noted, 60% of the overall P population is adequately treated by relatively safe alternative non-biologic treatments. The estimate that 100,000 patients are taking mtx or cyclosporine is unsubstantiated. Moreover, this estimate does not break down the P without PA vs. the P with PA portions. My strong suspicion is that most people who are taking mtx have P with PA. Thus, to the degree that a meaningful conclusion can be drawn from this unsubstantiated estimate, enbrel will be the strongly favored solution. (III) the 100,000 mtx/cyclosporine patients will immediately switch to the new biologics because the latter are safer With careful and frequent blood monitoring, people can take mtx for greater than 20 years before damaging their liver. It is not clear to me that the risk of widespread T cell suppression, infection, unknown rebound effect, etc. is safer than the risk of taking mtx. Currently , it appears that a case can be made for enbrel’s relative safety advantage over both mtx and the other biologics although its MS warning will serve as a cautionary message for some. The statistics contained in previous National Psoriasis Foundation(NPF) surveys are inadequate for analyzing the patient populations in each market segment. However, the NPF has recently announced that it will release the results of a new survey in the next 2 months. sales