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

To: Biomaven who wrote (6046)	3/27/2002 12:36:33 PM
From: jt101	Read Replies (1) \| Respond to of 52153

Biomaven/Rick/anyone, Any opinion of MLNM? Are they going to present data on MLN341 at AACR/ASCO? (American Association for Cancer Research, American Society for Clinical Oncology) I have a small, long position. With recent SEPR/VPHM price action, I am a little concerned as the price is heading lower slowly? Thanks, jt

To: Biomaven who wrote (6046)	3/27/2002 5:19:03 PM
From: ubrx	Read Replies (1) \| Respond to of 52153

Hello Biomaven, It is good to see some discussion of Scios here at SI. Natrecor was approved about a week before labor day last year. The 14 million in sales was almost all in the fourth quarter (9.6 million Q4 '01 -- Q3 '01 sales were the initial stocking at the wholesaler and a few hospitals and not much else). The company has very conservatively predicted 11 million in sales for the first quarter of this year. They should blow that away when they report on 4/18/02. I admit that some of the increased sales are priced in currently -- but how much? My GUESS is that $15-16MM is very possible this quarter. Given the 80/20 profit split with Quintiles the added revenue should help Scios reach profitability more quickly. Going forward the JAMA article and other mostly positive coverage in the medical journals should go a long way toward improving market penetration. As for your cautious MD friend, I think he is one of many MD's that are not fully convinced.... yet. Do you know if he has experience using Natrecor on CHF patients? Jim

To: Biomaven who wrote (6046)	3/27/2002 5:33:36 PM
From: Archie Meeties	Read Replies (1) \| Respond to of 52153

Bio, My guess is that nesiritide will replace milranone/dobutamine entirely in acute CHF, and quickly. Nobody liked milranone to begin with, but if there was no response to dopamine, there was really no other option except praying that diuresis will work or proceeding to a pump and getting on the waiting list for transplant. There's been multicenter, randomized, db, placebo controlled data for over a decade now showing that long term therapy withMilranone causes an increase in morbidity and mortality, and the data that it was actually helpful in acute use was sketchy. I expect the drug to achieve a high penetration rate rapidly, and I agree that their sales projection are low, maybe obscenely low. I don't think it will make it's way down to folks who have stable CHF who are sitting around home, unable to climb stairs, but able to walk. It's half life in the body is short, like in the order of minutes, so I don't think there would be much benefit for outpatients who could pop in for a weekly tuneup. The strategy of hospitalizing a patient with CHF before they decompensate is already an accepted strategy for CHF management. In these cases, which probably account for more hosp that acute CHF, milranone is not used, just diuresis. I don't know if your data includes these maintenance type of admissions or just acute CHF. The question of course is will natrecor eventually be used in these "tune-up" (the body as a machine!) type of admissions. If it can be shown to reduce overall costs (length of stay primarily), then it will be. I suspect that in a few years someone will see that natrecor therapy causes structural changes to the heart, like they did the the angiontensin inhibitors/blockers. But this is pure speculation based on the fact that it is a peptide and peptides usually can up or down regulate genetic expresion of multiple molecules, including trophic one. Of course, you would hope that then changes it induces are beneficial... There's also a lot of work being done in using np levels to assess function in CHF. This could also open up the market I suppose.

To: Biomaven who wrote (6046)	3/28/2002 9:53:41 AM
From: quidditch	Read Replies (1) \| Respond to of 52153

Thank you, Biomaven, for the thoughtful reply at a level that analyzes the segmentation in the potential market for natrecor I wasn't even aware existed -:). Implicit in your benchmarks (put another way, I am inferring from your statement "is likely already fairly valued at these prices") is a seven or eight multiple of sales as a formula. Is that equally appropriate here with the revenue split with its marketing partner or is the haircut too fine with which to quibble (80/20 split?)? Are there secular forces at work, generally speaking, that should compress or inflate the 7X-8X revenue formulation for drug companies and BT's with sales revenues generally? Clearly, in the case of a SEPR or a SGP, for example, assuming for the moment that they were characterized as antihistamine drug companies only, sui generis factors such as the portent of a move to otc status, would bear on the multiple assigned to that segment of revenues, in different ways. Given the existing level of sales of the drug, SCIO's value ramp has been rapidly discounted, but of course there are other possible value drivers. Thanks, as always, quid

To: Biomaven who wrote (6046)	4/2/2002 10:50:51 AM
From: quidditch	Respond to of 52153

Squib from today's PR: <The Company also announced Natrecor has received an Ambulatory Payment Classification (APC) pass-through code under the Hospital Outpatient Prospective Payment System from the Centers for Medicare & Medicaid Services. The pass-through payment code for Natrecor allows Medicare reimbursement for acutely decompensated heart failure patients with dyspnea (shortness of breath) at rest or with minimal activity treated with Natrecor in an outpatient setting. The reimbursement code became effective April 1, 2002.> Squib from Biomaven's post: <There are about a million admissions for acute CHF each year. There are also a substantial number of patients (one estimate I saw was 80k) that are at home but always on the verge of acute CHF. These could potentially receive (perhaps) weekly therapy at home, which would dramatically increase the market for the drug.> quid