Random thoughts from the 4th Q CC
- Impressed that 5 analysts (not including the 1 dropped call) joined the CC. The last meeting, I believe, there was only 2.
- I was a little surprised Evomela only reached 35% of the pharmacies it plans to sell to. Getting approval in mid-March 2016 instead of Oct 2015 seems to have temporarily impacted market penetration significantly I think. As explained by SPPI previously, they need to get the drug approved on the Pharmacy formularies which involves getting it approved at Pharmacy and Therapeutics committees at each hospital which meet once or twice a year. It seems many of those meeting were frontloaded in the beginning of the year. So using that logic they won’t get into 100% of formularies till ~ April or May of this year. Anyhows that’s one theory.
- Based on the Evomela mkt share (35%), I see the total market potential at around 80M at this time. I base this on breaking out the sales as ~$7M as current use and not including 2 to $3M sold to a few large hospitals (i.e. current users) stocking up. Also, does not include ~2M in deferred sales to warehouses. So I can see Evomela selling close to $15M/ Qtr by the end of the year.
- Unlike at the RBC Capital Markets Healthcare conference last month, they did discuss Poziotinib in breast cancer this time. I have to try to get a better read on what is OS in metastatic BC since it’s going on 13 months that the last pt was dosed in the Korean mBC study. Hopefully, we will hear something about the Korean study since Raj said we won’t hear anything about the US mBC study (at double the dose) this year.
- Raj is saying they’ll look at results of the 1st 10 pts of the 30 patients with exon 20 insertion mutation trial. Current treatments don’t help at all so they’ll quickly enroll those pts. If results are good this could be a big pick me up for the SP towards the end of the year. But right now, this is a big IF. I don’t think Raj has come through on any timelines he has given.
- When Adnan Butt of RBC Capital Markets asked at his company’s HC conference last month whether the Rolontis single P3 SPA trial was adequate for approval he didn’t really get a clear answer from Dr Raj and I was hoping we’d get a clearer picture at the quarterly. Well, he asked again yesterday and Raj said yes, the SPA will be adequate to get approval and the smaller P3 that didn’t start yet is to help get EU approval. So, I’m thinking the EU trial is to help get some interest to license the rights to Rolontis to a EU partner.
- They discussed the new Qapzola trial but not the elephant in the room which is when will the patent run out and how defendable it is or whether they can get orphan drug status w 7 yr exclusivity that comes with that. Really would love to know the answer to that before I’ll give one shred of excitement to Qapzola.
- Interesting that they removed $10M of convertible debt off the books for $9M. Would love to have heard a little more color on that.
- Regarding revenue, I think we hit the nadir and they turned the corner on revenue increasing. Fusilev seems like it will go a little lower to 4M or so and that revenue will be easily replaced by Evomela w the other 4 drugs selling around the same amount each Qtr.
- And more of an aside, per Dr. Yang, even though the Rolontis P3 trial is open label, the sponsor is still blinded. I did not know that the sponsor is blinded.
