NorthWest Biotherapeutics Inc (NWBO)

[f3tt3f]

Peak Sales Revenue Projections.

All this talk of when revenue is obtained reminded me of this little projected revenue exercise I posted on YMB.

Here it is again for your amusement/comments...

Many things have to occur before peak sales but, if we want to day dream, some quick back of the napkin sums lead DCVax to a conservative $121.5B in annual gross profit.
Workings below, if anyone is interested. Feel free to challenge:

IF both Direct and L are approved we transition from a speculative stock to an earning one, rapidly. (Unmet need, fast track/breakthrough therapy designation - let's say a steady rollout of all indications starting 2016). If not licensed, partnering would be required for many of the indications due to the scale of the job but some (GBM) could potentially be taken to market by NWBO solo. None the less, lets assume a blanket partnering deal of 50% (open to input on the split).

The market for ALL solid cancers is massive. Since DCVax is a new category of drug, we can't use current market size (current revenue) but instead need to think about patient numbers.
Total annual cancer diagnoses as of 2012 were 14.1M, minus ~600,000 leukemia and lymphoma = 13.5 million.

Les Goldman indicated treatment costs would be around $40k per year, over 3 years for GBM. We could reasonably assume similar pricing for other indications (For the sake of the simplicity, we'll use the total of $120k per annum due to new/existing patient overlap).

At peak sales, it's estimated that COGS would be around 25% (much lower than Provenge due to the batch manufacturing process and cryopreservation). This gives us a per patient profit of $90,000. Split with partner gives NWBO $45k

To be conservative, let's assume that the DCVax platform only captures 20% of potential market, so 2.7M
multiplied by $45k is $121.5B. That's annual gross profit. Not bad.

You can work out your own EPS (remember to include estimated future issuances).

Just a bit of fun, but nice to think "what if" now and then.

Then:

Actually, just an amendment to this. The COGS of Direct will probably be higher than L, due to L's outpatient administration and Direct's (presumably) image guided administration. But even if it brings COGS to 50% the potential is still mind boggling.

Post Cognate 8K discussion:

Just thinking about this now, and for conservatism's sake, let's assume NWBO buys Cognate (which another poster suggested as a possibility after approval) and the manufacturing costs are borne directly by the company (ie. no shares for payment)

Let's say those COGS are a more conservative 50%. (Provenge = currently 70% but aiming for below 50% - DCVax is much cheaper from get go.)

That gives a per patient gross of $60k (based on 120k per ann - min 3 year course, 3 patients overlapped).

Now lets assume we couldn't get a favorable partnering deal and ended up having to give away 75% of gross profit. That leaves NWBO with just $15k per patient.

Now for argument's sake, lets say for some reason we only capture 5% of the solid tumor market. ~675,000 patients x $15k gross profit per treatment per year.

$10.1B per year.
remember, that's not revenue. That's gross profit.
And that's being conservative.

Again, please challenge these figures for an even more conservative estimate.
The best I can do is lower the market share even further, assuming that the less terminal cancers won't fork out for the treatment when SOC might see them through, but just taking terminal patients with no other option we have a massive market (7.6m deaths in 2008 or 13% of all deaths of any cause)
Even just using US patient death numbers in the following indications (Lung, colon/rectal, breast, pancreatic, prostate, liver, ovarian, esophageal, GBM)
we get an unfortunate 380,000 deaths annually (using 2010 figures).

It's hard to imagine a scenario where a successful DCVax trial would net NWBO less than 20% of that population but let's just say 10% to be extremely conservative.
Annual gross profit would be $570M. (3 times* our current market cap) *1.5x today's

Food for thought, should DCVax do what we're all hoping it will.
Fingers crossed for all involved. Especially the patients.

Be interested to get the thoughts of Ihub members on how else to value NWBO.