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Biotech / Medical : Sepracor-Looks very promising -- Ignore unavailable to you. Want to Upgrade?

To: Bob Swift who wrote (2862)	5/19/1999 10:29:00 PM
From: BMcV	Read Replies (1) \| Respond to of 10280

>>What do you think the net income from Nori would be if SEPR were to market it on their own ? << My guess is that it would be small in big pharma terms, but significant in SEPR terms. A couple of numbers from the CC, from memory: $500 million in marketing to establish a billion dollar branded drug; $100 annual advertising expense for Claritin. There's no way SEPR can match those numbers without a partner. So, no direct marketing to the consumer. Also, SEPR's sales force is geared to handle specialists at the hospital, not the general physician community. That's why it can be so small (50 compared to several thousand) and still be effective, at least for a drug used in a hospital setting like Xopenex nebulizer. So, without a partner, it seems to me that Nori would only be sold to ER docs and some other specialists, who in turn treat only seriously ill people, who really need a good drug. If Hismanal sells $50 million without being actively marketed any longer, that seems a reasonable estimate for Nori, despite the drug's merits. With 25% margins and 40 million shares, that would be 25 cents a share. All of which implies there's little doubt SEPR will find another marketing partner for this one. Once-a-day, fast-acting, nonsedating--someone should be able to make a half billion dollar drug out of that. As Janet the allergist said, Claritin is not all that great a product. (DCL, on the other hand, might be). Allegra--not quite from a standing start, since physicians know the connection to Seldane--has $500 million in sales already. That should be worth quite a bit more to SEPR, even after deducting JNJ's share of the royalty. If JNJ and SEPR split 10%, that would be about 62 cents a share, based on 40 million shares. But again, the key for me is whether or not you think SEPR will bring enough of its potential products to market to become a profitable, mid-sized pharma concern. Favorites will stumble, dark horses will emerge, but at the end of the day, will the company succeed in commercialising their IP? If they will, which I believe, the stock still has quite a way to go before reaching the market cap of comparable companies.

To: Bob Swift who wrote (2862)	5/19/1999 11:35:00 PM
From: David Howe	Respond to of 10280

Thanks regarding Meridia. IMO, it would be difficult to market Nori on their own. They can certainly do it and they might obtain 1/2 of the sales that they would if they partnered with someone. This was their logic on the conference call and it makes sense. However, I think that a partner is probably the correct plan of action. I'm in a model dilemma on Nori right now. I've toyed with the idea of simply moving out the revenue from Nori one additional year and also subtracting the royalty that will be paid to JNJ. That might serve to make the model sufficiently conservative. It would be great if we saw revenue from DCL starting in Q4 of 2000. This would help offset some of the additional costs of bringing Nori through the trials on their own. The model would remain unchanged since it doesn't look at years 2000, 2001 or 2002. The model starts in 2003 and that's when we expect to see some serious numbers on the bottom line. I remain very bullish on the mid to long term outlook. Short term, I'm confused as usual. Dave