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Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (13760)	10/27/2004 12:53:08 AM
From: Cal Gary	Read Replies (1) \| Respond to of 14101

Hi JK Sorry for the late reply, my head and heart's been with several other stocks. BTW Compare CVQ (coldFX) with DMX. Thanks for the CaptainKlutz post, he got lots of great thoughts and info! Isn't it supposed to be calculated "on the back of a hanky?" :0) With recent developments, I feel formularies will eventually (or in the worst case be forced to) revisit Pennsaid as other COX-2 products gets yanked from the market or re-labeled with far more restrictive usage. I like the Captain's thoughts on Private vs Public market % but he did not provide enough hints on how that's derrived from or a source, but I'll assum its close. Any way, given the $7m cdn revenue "moving annual", that's roughly 1.4% of the Canadian OA market. Still leaves a lot more ground to capture. Assuming (big stretch of course) we get all of the OA Private Insured market (33% of total Candian OA market) that's $165mm dollars a year. Which is nothing to spit at! Reposted here for safe keeping and searchability. http://www.stockhouse.ca/bullboards/viewmessage.asp?no=8569777 SUBJECT: Value of U.S. Approval? Posted By: CaptainKlutz Post Time: 10/24/04 13:15 « Previous Message Next Message » Anyone want to take a shot at estimating the value of a U.S. approval to the company? Here's a back of the enveloppe calculation on what you might see for U.S. sales: The moving annual total for Pennsaid sales in Canada as of August is about $7 million Cdn. That is, of course, all in the private market as the drug is not covered by any of the provinces. Among OA patients in Canada only 1/3 are covered by private insurance. The other 2/3'ds are covered by the public insurers. So essentially DMX doesn't even have access to 66.6%% of the market in Canada. That situation would not be repeated in the U.S. The insurance system in the States is far more expansive and one can reasonably expect that Pennsaid will be covered for all those who have drug insurance. Assuming you have 100% market access the $7 million in Pennsaid sales becomes $21 million. Population wise, the U.S. market is about 10 times the size of the Canadian market. But in terms of drug consumption the multiple is more like 15 to 20. Assume 15 and $21 million becomes $305 million. So at the end of year 2, assuming the growth in sales remains flat througout year 2, you'd do around $305 million in sales. That's not unreasonable. And there are a number of potential upsides: 1) A higher price. $305 million assumes parity pricing between Canada and the U.S. That's highly unlikely given the price of other therapeutics in the category in the U.S. 2) Better marketing. No U.S. distributor could be as hopelessly underqualified and underresourced as DMX has been. 3) The new Medicaire drug benefit. Come 2006 there will be a large number of people with drug benefits. (40 million I think) $305 million may, in fact, be the floor. According to a study by researchers at the Tufts Centre for the Study of Drug Development, the probability that a drug will pass phase III trials and obtain FDA approval is 89%. So Pennsaid has a good chance at approval. As for the life cycle, the 3-year data exclusivity period is a certainty. And actually the period of market exclusivity is longer than 3 years. Under the data exclusivity rule, the FDA can't begin to review a submission until the 3 years lapse. So add in the actual review time for a generic submission and it's more like 4 1/2 years. I still don't know what sort of measures they will use to assess generic equivalence. It definately won't be bio studies measuring absorption of the drug into the blood plasmsa. The following link mentions recent legislation that seems to address the problem with that approach by allowing the Secretary to take into account scientifically valid measures of absorption at the site of action. I'm just not sure what those measures might be. bio.org Until they become clearer there seems to be a bit of a barrier to the approval of a generic Pennsaid. So it seems to me you have a good shot at generating some signficant U.S. revenues over at least a 4 or 5 year span. That has to be worth something in today's dollars. More importantly, it's hard to see how it wouldn't be worth something to a U.S. pharm co. given the current outlook for new products. I think if I was DMX's new management my number one priority for next year would be signing a deal for the U.S. You may not get Pfizer or Merck but probably have a great shot with one of the newer players (King Pharmaceuticals for instance). Too bad there's been so many setbacks with this company. Congratulations to those who have tried to reverse the damage. I hope your efforts prove successful as the company is still sitting on a significant asset, IMHO. captainklutz