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I didn't give an exact figure because we do not have the data to give an exact figure. Only Dendreon does at this time.
My analysis is in the SA comment thread.
Dendreon management said with all three plants online, they would be able to serve a maximum of between $1.5B and $2.5B. All three plants will be online by summer 2011, though not all running at full capacity.
If you heard management say $1.25B limit by 2011, I'd be interested in where.
Well, by the rules the FDA apparently reserves for small companies they shouldn't have approved it here. It had only a PFS benefit with no proven QoL data and no OS. That means no approval for other companies.
And new Czar or not, CONGRESS has mandated that FDA approvals and CMS reimbursement MAY NOT consider cost... so we're a long way from NICE regardless of your political views on healthcare reform.
Well, the only humans ever helped by gene therapy were SCID-kids, so...
Frankly, this approach makes way more sense than attempting systemic gene therapy. Theoretically you could gene-modify the bone marrow ex-vivo, clear the material of vector, and proceed largely as one would with a donor-matched transplant.
The writer has no idea how to calculate QALY and the numbers he includes are pure BS. They are off by a factor of 5x-10x.
No, it doesn't. This is a terrible article written by a guy who has no idea what he is talking about.
I encourage either you or Dew to get rid of this post and instead reference the whole link to the Seeking Alpha article so you can see the comment thread.
The 2,000 doses was reality mostly for retail. I never sensed most of the pros (or analysts) we spoke with thought they could reach a billion in 2011, and most not even a billion in run rate. That said, our prediction of falling prices back in March was based upon analyst overexhuberance so...
The disconnect I've seen since the $186M guidance is in the shape of the curve. Analysts missed the 2010/11 split badly and DNDN management made an error by not communicating the accurate split earlier. So the spent msot of June trying to simultaneously say everything was going to plan while walking down 2010 estimates. Tough sell.
When people channel-checked and learned only a small % of the 50 sites had written scripts by six weeks into launch, the market readjusted.
The wierd thing is I think we're the only ones that redid our estimates so far, so the overbuilt consensus numbers are out there. And while I hate to use the phrase, I think where DNDN goes in Aug and Nov largely depends on the "whisper numbers" for revs that are (atypically) lower than consensus.
Naw, multi-strategy was enough, thanks :)
Also, come to think of it, what do you mean precisely by "negative guidance regarding ramping up production"?
TIA
According to the Mars guy, the percentage of cocoa matters less than the way it is processed. The stuff he was handing out tastes either like a Hershey's Dark bar or a regular Hershey's bar (more or less) and both have flavonol content in that range if consumed with fair regularity.
And if billion-dollar run rate comes by the end of 2011, would you still call the company overvalued at $28?
Just out of curiosity, what the average holding period for a name in your fund?
Aren't sales "misses" for 2010 already baked into the price?
They had a booth at AHA earlier this year and had samples. I'm a chocolate fan and was bored between sessions, so I stopped. Lucky enough that one of their heads of R&D for this line was at the booth. Fascinating conversation. They are rolling out a neutraceutical line and morphing into energy drinks.
In cycling, I'm consistently amazed at how many cyclists grab chocolate milk right after a ride. The Mars guy and I talked about chocolate as an in-ride food, which is always an issue for distances longer than about 50 miles.
His claim was that Mars' generations of chocolatiers gave them a competitive advantage over other developers in this area. They've worked out a unique way to process the chocolate to preferentially preserve the flavonols. In fact, they can tweak the process to provide different flavonol and neutraceutical profiles.
Quite fascinating. I told him if they decided to do in-ride foods, I was willing to be first in line! I'm quite tired of the goo and gelatinous cubes I have to eat now. The only decent chocolate flavor out there is from Gu, and they spike it heavily with caffeine. Great for overnight drives to rides, makes me so twitchy during a ride I go out too hard.
EDIT
If the Mars guys was right about their process being unique, I would guess you'll see highly variable results from this segment. Their extensive research suggests merely having flavonols in the cocoa product does not predict outcomes, you have to have the "right" flavonols.
There isn't anything unique about Provenge that makes it any more or less difficult to project revenues out 3-5 years than any other solid tumor drug. Whether it is new competition or developments like k-ras mutations, projections for drug sales are always difficult.
I understand you're talking your book and I also have a particular point of view. The nice thing about the market is it will tell us who's right :)
I think the key think is "were". While my sample is skewed because of our notariety in covering the stock, nearly everyone was involved if they were allowed by their charters. If they owned the name as of yesterday, it was only in much smaller size as a core position they traded options around. Many/most had no significant position. I don't see the name at all overowned by the pro crowd.
There's no way Congress tackles price controls on drugs until after 2012 Presidential election. Even if they started immediately after the election, it would take at least a year to pass. That's 2013. It is highly unlikely oncology drugs would be the first target as they are a small percentage of overall spending. If they are included at all, which is also highly unlikley given the political firestorm that would result, they would be pushed off a few years.
There is no reasonable analysis that provides for Prrovenge price controls before 2015, and probably not for some time after that. The politics of it jsut don't pencil.
Listen, I understand the policy point you're trying to make. I'm not obtuse and I do, after all, do this for a living just like you do. Give me a little credit.
If you want to argue this as a policy thing about what we should be spending on medical care in the last years or months of a patient's life, I have no problem with that. It's an interesting and relevant debate that was at the heart of much of the recent healthcare debate. Some countries, notably the UK, approach this differently than we do in the US.
It's even a big debate in prostate cancer. The whole screening debate has nothing to do with whether screening is good or bad. Screening for PSA clearly saves lives. The PSA screening debate is caused by the perception we overtreat prostate cancer. It is largely driven by insurers and oncologists, both of whom see economic losses from screening. Ultimately, however, it is a debate about whether we should be treating a 70-year old man for prostate cancer. Since that debate is impossible to have rationally in the current political/social environment, instead we debate screening so we can de facto not treat that 70-year old man because we never know he has prostate cancer.
But all this is largely immaterial to Dendreon at this time. CMS is not allowed to make coverage decisions based on price. You can argue this is silly and unsustainable. You might be correct. But that argument will have no bearing on the NCD outcome for Provenge.
Every cancer therapy has a subsequent therapy after it until the patient and the doctor give up. Say treatment 3 in a line of 5 is not worth it because a patient might also decide to move on to fourth or fifth line treatment is silly. Sorry if you don't get it.
Since we do not have a cure for any cancer, by your math all cancer treatments would cost their actual cost plus the cost of all therapies after them.
This is silly.
It may appear to you cost is in play, but from CMS guidance on NCDs:
“Cost effectiveness is not a factor CMS considers in making NCDs. In other words, the cost of a particular technology is not relevant in the determination of whether the technology improves health outcomes or should be covered for the Medicare population through an NCD.”
That makes for a nice narrative, but isn't accurate. The process doesn't take price or economics into account when making the NCD.
CMS excludes cost considerations from the decision process for this type of coverage determination. The determination is made solely on the strength of evidence or lack thereof.
Yup. Seeing lots of signs we're closing in on a bottom. Would rather see this in August given typical seasonal pressures.
It means they realized they can't make it on dilution of only 400M and will be back with a new proxy asking for an even large cap. IMO, of course.
Damn, Aschoff has got the religion. Too funny.
I read this thread. I'm not sure I agree with $22 and I don't agree it will take two years to get back to post approval levels. We forecasted this price movement post-approval back in March so not a bit of the price action since approval has surprised us (except how high it went shortly afterwards - we didn't expect upper $50s).
What happens with the stock price over the next 6-9 months should not matter at all to long term investors. For traders, options players, and those who missed the boat the first (2003), second (2007), and third (2009), and fourth (2010) times around it matters some.
COG will start in the 30% range and drop to the 20% range. Hardly bank-breaking. I think the company can live on 65-75% margins.
Manufacturing a Provenge dose is orders of magnitude easier than manufacturing protein biologics. The only complicated portion of Provenge manufacturing is the logistics. THOSE logistics were figured out decades ago by the rapid package shipping industry.
The most complicated portion of Provenge manufacturing involves the FACS device, which was approved by the FDA in the mid-1990s. It does cell separation via bouyant density. Hardly rocket science compared to the complications involved in MAb manufacturing.
There is a reason why a MAb plant takes years and hundreds of millions to construct and a Dendreon plant takes 12 months and <$50M to build. Provenge dose manufacturing is easy, easy, easy.
A high school graduate with suitable attention to detail can perform Provenge manufacturing. QC of the finished product takes skills most cellular biology majors mastered in senior lab.
DNDN's earlier trials don't show more long term survivors because the 9901/9902a studies were censored at 36 months per protocol. The full, uncensored survival curves, which still include censored patients in the Provenge arm, have never been presented in public so you can't really tell the tails (no pun intended).
IMPACT shows people out past four years, but won't get any better because the company is no longer following patients for survival after opening Frovenge and Novenge patients to compassionate use Provenge in May 2009. Recall also that the control in the IMPACT study is an active, survival-lengthening control that 75% of the men in 9901 got and ~70% of the men in IMPACT. This is not the case in the Tax, zibotentan, PROSTVAC, or any other randomized CRPC trial I'm aware of.
Despite these limitations, the tails of the Provenge curves are equal or superior to any other available therapy.
I bet the author of that story, like most people who criticize Provenge manufacturing as complex, expensive, and prone to contamination, couldn't even name the steps involved much less basic information about protections taken to avoid contamination. They heard someone say it was complicated, it's "different" than normal, so they parrot the "complicated" line with little in the way of independent analysis.
Finally, let's not be purposefully obtuse here (not a personal accusation). If a person knows ANYTHING about the rigor of the FDA CMC approval process, especially for a first-in-class theapeutic with a unique manufacturing process, at least some credit should go to DNDN and the FDA for perhaps thinking about and addressing these issues (particularly contamination) in advance.
Pazdur's continued reliance on inflexible conservative biostatistical approaches unsurprisingly puts his rubber-stamping ODAC atop the fail list.
You're right on the screw up. I'm REALLY surprised they haven't made an edit to the proxy. I think it has something to do with Italian law and lead times for notification.
400M shares at $0.40 = $160M
400M shares at $0.30 = $120M
I'd be surprised if that gets the company through approval, you know, assuming...
Oh, I think GETA is clearly in first place. I predict we'll see a similar deal from CTIC shortly after they get enough Italians in a room to get their quorum.
You didn't miss anything. Just looking beyond that.
Cool,thanks. That'll give the stat geeks something to whine about for the panel! Should be very entertaining.
Not for nothing, but wierd the BMY people at ASCO who were asked the question didn't know...
What's your source for confirmation BMY didn't do a final SPA amendment to any ipi as the study arm? None of us at ASCO could get anyone nailed down one way or the other. Not saying you're not accurate, just curious as to how you know.
Well, it probably is an issue with alpha spend, which is a different issue than the actual alpha reported. If they spent all p=0.05 on the primary endpoint of ipi+gp100 vs gp100, there is no alpha to spend on the "any ipi" or "ipi monotherapy" analyses they will be asking for approval.
This assumes, of course, that BMY will not be applying for a ipi + gp100 dual approval label.
One path I've heard is BMY will apply for accelerated approval on the peptide study and use the DTIC study for full. This isn't available to them since they changed the primary endpoint in the peptide study to OS.
According to people on this board, BMY has said they will file the peptide study data for approval.
I think this will be a fascinating dilemma for the FDA, particularly if BMY didn't file a second amendment to the SPA to convert their alpha spend to any ipi arm from the ipi+gp100 arm. One wonders whether Fleming will be trotted out again by Pazdur to lecture on the evils of unplanned analyses or whether Pazdur will just let this one slide by.
Melanoma patients should figure out whatever the "wrong" side of Pazdur's bed is and station someone there to make sure he gets up on the other side every morning between now and the PDUFA date.
BMY has said they're filing on these data, so the issue is germane for at least a little while. Digging in on the subject, here's what I found in addition to the paper cited previously...
Human Immunology 61, 334–340 (2000)
Frequencies of HLA-A2 alleles in five U.S. population groups: Predominance of A*02011 and identification of HLA-A*0231
Jennifer M. Ellisa, Valerie Hensonb, c, Rebecca Slackd, Jennifer Ngb, Robert J. Hartzmanb and Carolyn Katovich Hurley
a Department of Microbiology and Immunology (J.M.E., C.K.H.), Georgetown University Medical Center, Washington, DC, USA
d Department of Biostatistics (R.S.), Georgetown University Medical Center, Washington, DC, USA
b Naval Medical Research Center (V.H., J.N., R.J.H.), Kensington, MD, USA
c The Methodist Hospital (V.H.), Houston, TX, USA
TABLE 1 Phenotypic frequency of HLA-A2 within
the study population
Population Population size #HLA-A2 positive
Caucasian 61,655 30,596 (49.6%)
African-American 8,288 2,864 (34.6%)
Asian/Pacific Islander 2,275 819 (36.0%)
Hispanic 4,879 2,286 (46.9%)
Native American 5,882 2,922 (49.7%)
Total 82,979 39,487 (47.6%)
TABLE 2 HLA-A2 allele frequencies and tests of overall significance of HLA-A2 frequency distribution tests in
the five populations
This table doesn't reproduce here, but here's the summary data for our purposes...
% HLA*02011 in HLA-2+ populations
Caucasian 96%
African-Americans 59%
Asian/PI 53%
Hispanic 73%
Native Amer 94%
iwfal is right, there is something amiss here. I find it odd I've seen the trial described multiple ways in presentations over the years.
In any case, in the primary patient population (http://www.cdc.gov/cancer/skin/statistics/race.htm) the difference is not that meaningful (50% vs 48% (.40=.50*.96)). For revenue calculations, it would be moot. For the intitial label, it will be interesting.
David
I believe the difference, in this specific instance, is just differing nomenclature.
These two shed some light on that issue (sort of):
http://en.wikipedia.org/wiki/HLA-A2
http://en.wikipedia.org/wiki/History_and_naming_of_human_leukocyte_antigens
This article doesn't even have the subtypes:
http://www.biomedcentral.com/1741-7015/4/5
I've seen ipi presentations at conferences use both notations and consistently describe each as present in ~50% of the population.