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Mizuho increases PT to 78.
We expect Teva to convert 95% of the market to Bendeka before 2019 but then decline share to 70% in 2020, and all the way down to 58% in 2026," Koffler wrote. Eagle no longer has "take-back" rights to Bendeka, but its royalty increases to 25% from 20% in January.
Very unclear, however the market reaction is impressive
Unclear, but I would think the PR would have mentioned a royalty step-up if this provision of the original terms were still operative.
There's apparently no milestone payment for the (delayed) J-code, or today's PR would have mentioned it. I presume that the royalty step-up also no longer applies, but I'm not sure.
Looking back at the agreement with teva.
"Eagle may earn an incremental step-up royalty upon the achievement of future milestones"
With the unique J-code, do you think the 20% increases?
Unique J-code for Bendeka
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) and Eagle Pharmaceuticals, Inc. (Nasdaq: EGRX) announced today that the Centers for Medicare & Medicaid Services (CMS) has established a unique, product-specific billing code, or J-code (J9034), for BENDEKA® (bendamustine hydrochloride) Injection. The J-code will become effective on January 1, 2017.
Upcoming Events
- Ryanodex Animal Study Read Out Q416
- Final J Code Ruling Q416
- NDA submission Pemetrexed Q416
- Rolling NDA submission Ryanodex in EHS Q416 / Q117
If I'm not mistaking a J Code would also trigger a significant milestone payment.
However I am not sure on the specifics and whether that payment still remains intact after earlier denial of J Code
A J-code for Bendeka would allow Medicare to reimburse Bendeka at a higher price than Treanda.
EGRX reports Ryanodex preclinical data in Ecstasy-induced hyperthermia: #msg-126173222.
I am new here, how does a J-code win affect EGRX's
valuation? Thanks!
LLY will undoubtedly sue under Hatch-Waxman in order to trigger the 30-month stay (just as TEVA did when EGRX submitted the Bendeka Paragraph-IV challenge). That won't rule out a patent settlement, of course.
Suing Eagle in court for patent infringement once they file their NDA.
What do you mean by: "exhausting all legal options"?
Dew do you see any reason / scenario in which Eli Lilly would partner with Eagle on their RTU Pemetrexed before exhausting all legal options?
I'm sure EGRX and TEVA are discussing a buyout but haven't agreed on a price yet. TEVA is posturing that 3.5 years of sales is pretty much it and after that Glenmark (with other generics) will enter. They seem to push this argument pretty aggressively (and emotionally as seen from the CEOs response on this issue during the last CC). We do not know, however, what the terms of the settlements with the generics are (and of course TEVA isn't motivated to release them especially if they are favorable to them and protect the franchise beyond Nov2020). This would immediately add a few hundred millions to the price of a potential EGRX buyout. I personally do not believe that TEVA, despite having a strong hand regarding the claims, settled with the generics on unfavorable terms. They know this space too well to do such a dumb thing. Thus, Bendeka sales are likely to continue robustly past 2020 and TEVA needs to pay a hefty premium if they want to buy EGRX. This explains the price today (not the peanuts from the other products/pipeline...).
Good point which could point to Eagle playing hardball and wishing to remain solo
or Eagle knew they wouldn't receive a fair offer valuing Ryanodex in EHS, which hadn't shown any clinical efficacy at that point, and the rest of their pipeline, which was far from producing revenues.
TEVA's drop today just has me musing on new revenue streams for them
Of course the biggest caveat for me is TEVA's inability to bring a generic epi pen to market may have spooked them from paying a premium for Ryanodex in EHS due to how similarly the two drugs are administered.
The counter-argument is that Teva could have acquired EGRX more cheaply in Feb 2015, when they instead settled all litigation with EGRX and licensed Bendeka.
Ramblings on Why TEVA should acquire EGRX
Tariff has stated that earnings from BENDEKA are highly predictable for at least the next 3.5 years. So if we low ball that number at $30 million in revenue royalties from TEVA we get $420 million. So lets add in Eagles cash of roughly $127 million and we get $547 million
Also, over that time lets add $5 million a quarter in revenue from Ryanodex MH and the rest of Eagles's niche drugs, we get a total of $70 million
Over the next 3.5 years Eagle's cash and revenue value will equal roughly $617 million
So if we subtract that from Eagle's market cap of $1.1 billion we get an EV of $483 million for the rest of Eagle's pipeline which includes all sales from Bendeka and Ryanodex after 3.5 years. Pretty cheap if you ask me.
Thoughts or comments welcomed
P.S. go easy, I'm an amateur
Hopefully we learn more about these two items
- New NDA under development targeted to reduce number of
injections of $400M branded product in a growing market
- Undisclosed next project
EGRX Investor Day webcast 11/11/16:
http://finance.yahoo.com/news/eagle-pharmaceuticals-announces-save-date-203000863.html
Notes From Management Meetings - RBC
RBC Capital analyst, Randall Stanicky, reiterated his Outperform rating on Eagle Pharmaceuticals (NASDAQ: EGRX) after hosting two days of meetings with management.
Three key points include: 1) the pipeline is led by Ryanodex in EHS and ecstasy/meth
2) there is further "upside" from the bendamustine franchise
3) capital deployment remains a wildcard
The analyst believes EGRX has established a solid underlying cash flow base with upside to come from the pipeline, greater BENDEKA duration, and capital deployment. EPS for 2016-18E increases to $3.51, $4.31 and $5.39 and the price target goes to $80 from $78.
So am I confusing averages with highs?
This is the first reported period where Bendeka's market share throughout the period was as high as 80%.
We been at 80% for a while now
I wish Kangio would get moving
The ^SPSIBI index of small/midcap biotechs is down sharply today.
Looks like the only change is in Treanda -- "achieved 80% market share" as of Aug 5th / Sep 9th.
I didn't see any other changes. Yet the shares are down $3.5
Is Eagle buying shares on the open market?
Who knows, I am impressed at how well this is holding 60, In the past Eagle has popped hard and faded hard on news. Feels different this time.
Upcoming catalysts
1. NDA for Ryanodex label expansion in Exertional Heatstroke (2H16)
2. ANDA Pemetrexed (2H16)
3. First Ever Eagle Pharmaceuticals Investor Day (specific date unannounced)
4. More clarity on Kangio pathway towards FDA approval
In regards to Pemetrxed, Eli Lilly will definitely take Eagle to court over patent infringements most notably their method of use patent, U.S. Patent No. 7,772,209, describes a method of administering pemetrexed disodium — Alimta's active ingredient — along with folic acid and vitamin B12 to reduce the drug’s side effects. This patent doesn't expire until 2022
Eagle claims to have a way around this.
Nice Call, I wasn't sure what the S&P600 news would do, Eagle didnt even PR it
S&P Effect (type of)
Combined with the high short interest, and we should have a nice little pop today!
Eagle added to S&P SmallCap 600:
https://finance.yahoo.com/news/chemical-financial-set-join-p-215100314.html
Hudson Executive more than doubles their stake in Eagle now totaling 950,600 shares
https://www.sec.gov/Archives/edgar/data/1652522/000121465916013256/xslForm13F_X01/infotable.xml
The 2Q16 10-Q has been filed:
https://www.sec.gov/Archives/edgar/data/827871/000082787116000074/egrx_q2x2016.htm
Also: CEO's termination of 10b5-1 plan, which was a harbinger of today's bullish news.
Good to see EGRX getting back to where it belongs.
I think with the combined news of:
-Positive FDA meeting on Ryanodex for EHS
-Share buy back program
-new board members who are focused on shareholder value
This will continue to go back up to where it was a year ago.
Brief comments on the 2Q16 results: #msg-124400547.
Could they have included some milestone payments?
Looks like I was a little low on my $24M guess for 2Q16 Bendeka royalties.
Ryanodex EHS news is very bullish: #msg-124400378.
Eagle Pharmaceuticals, Inc. Reports Second Quarter 2016 Results
http://investor.eagleus.com/press-release/eagle-pharmaceuticals-inc-reports-second-quarter-2016-results
The biggest takeaway from ER is that 'Ryanodex for EHS could be on the market as early as next year':
US Food and Drug Administration (“FDA”) determined that no additional human safety and efficacy data is required for the submission of Eagle’s New Drug Application (“NDA”) for Ryanodex® for the treatment of exertional heat stroke (“EHS”), further confirming that a hybrid development program comprised of clinical data from EHS patients and positive preclinical data from animal studies constitutes an adequate regulatory pathway for the NDA submission;
The only negative development is that Eagle will require new trial for Kangio, but I think the market has already discounted this news based on the drop when the CRL came out:
Discussions with the FDA regarding the design of a human study for RTU bivalirudin are underway;
Short Interest....
This is what thestreet.com was reporting yesterday:
"The current short interest as a percentage of the float for Eagle Pharmaceuticals is extremely high at 74.8%. That means that out of 5.39 million shares in the tradable float, 4.03 million shares are sold short by the bear."
Although I'm seeing different numbers now for the float (9.33M)
It should pop up nicely because there is such a high short interest in EGRX. The threat of re-purchasing $75M in shares at any point would get me out as a short.
I am thinking that this might actually happen as well.
It just makes sense with what you mentioned, and the fact that TEVA is paying EGRX $80-100 Million in royalties every year for Bendeka.
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