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Biotech / Medical : VD's Model Portfolio & Discussion Thread -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (9358)	8/22/2002 2:10:15 AM
From: Vector1	Respond to of 9719

Spek, I have seen estimates for the entire group of EGFR drugs at 3-4 billion. Of course if they only work in monotherapy for salvage patients then the market is smaller. IMO around a billion at peak. I do not think Iressa will be approved. The phase IIs were not powered for approval and of course the combo was a complete failure. OSIP/DNA, on the other hand, are conducting the trials in a way that Tarceva has a great chance of approval even it fails in the combo trials. Tarceva also has a number of other advantages including higher potency at lower doses. As for other competitors Erbitux has had mixed results but the company's former CEO has been indicted and the entire company is going to be under the stict scurting for the foreseeable future. The ABGX monoclonal is the wildcard. It is supposedly highly potent but is at the earliest stage. It will need to show a clear advantage over Tarceva as it is an injectible. As for valuation, if OSIP is successful clearly the best comp would be IDPH. They have a successful cancer drug and just happen to have a partnership with DNA as well. Rituxan is at about a billion in sales (run rate). Thus the market is valuing Rituxan at at least between 5x and 6x sales (half of which are split with DNA) and leaving a billion plus value for Zev and the pipeline given IDPH's lofty $6.7b valuation. I think $500m potential for Tarceva is not a strech. It is not highly toxic and will be used if it provides even marginal benefit. Look at LLY's Gemzar. Modest benefit at best in terms of survival but not super toxic and palliative. Second quarter sales were $219million. No reason Tarceva at peak can't approach those numbers. And if we get lucky and the combo trial is successful (admitedly a low likelihood) then we have a monster home run. V1