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Biotech / Medical : NPSP NPS Pharmaceutical -- Ignore unavailable to you. Want to Upgrade?

To: Miljenko Zuanic who wrote (198)	3/9/2004 8:14:32 PM
From: tuck	Read Replies (2) \| Respond to of 363

From a GS report posted a few weeks ago by George, the predialysis market was $100M, or 20% of them total SHPT market for Cinacalcet: >>5. FDA APPROVAL OF CINACALCET EXPECTED IN MARCH 2004 On November 15, 2003, Amgen announced that the FDA had granted priority review to Cinacalcet for secondary hyperparathyroidism (SHPT) associated with renal disease, implying six- month review time. Based on the filing date of September 8, 2003, an FDA decision may be reached in March 2004. We estimate that Amgen will pay NPS a 10% royalty on net sales. Amgen will also pay NPS $5-10MM in milestone fees on approval, depending on the scope of the approved indication. There is no milestone fee for European approval. The market potential of cinacalcet in SHPT could expand from $400MM to $500MM if predialysis is included.<< Message 19797293 Today's action took -- well what do you know? -- ~$100 million off of the market cap. Except that at 10% royalty rate, the revenue impact on NPS is $10 million. Again, I hear, though I can't confirm, that Amgen got an approvable letter for predialysis population but will have to conduct trials. >>Due to lack of Medicare coverage of oral drugs until 2006, we have assumed gradual adoption with sales of $9MM in 2004 and $135MM in 2005.<< GS again, courtesy of George: Message 19893313 The trials will be about done by the time Cinacalcet gains market momentum, anyhow. I don't think this hurts NPS too badly, and further downside due this little disappointment would be unwarranted, IMO. However, I'm a little more nervous about the upcoming PREOS results. Could the current market cap have some speculation that the human carcinogenicity data will be good enough to get a better label than Forteo? If so, and said data turns out not to be noticeably better than Forteo's, perhaps a bit more downside could result. Especially, since Jackson may have caused a bit of that speculation by saying he didn't think PREOS deserved that warning on its label. Well, it's for all these reasons that I am hedged. Your take would be welcome. Cheers, Tuck