I listened through the conference call and now expand on my analysis of Ariad’s Q2 results. I had modest but hopeful expectations for the numbers. Q2 results confirmed, if anything, the depth of the setback to Iclusig by the U.S. suspension. I do think we are at or very near the baselining on Iclusig revenues and stats, upon which slow but modestly steady improvement will occur over the next several quarters. 2015 quarterly results will be a more meaningful indicators for Iclusig.
Summary – Very mixed bag, more sober than upbeat as in the past. IMO, cash is quietly the biggest issue again, no extra money to accelerate trials, and very high burn rate ~$70mm/Q. Europe a net bright spot. ‘113 hardly mentioned. Dosing trends net flat. Recovery will be very slow. Starting a $5’s, though, price appreciation/roi for investors should be more than a cd ;0, but return to greatness long off. Really looking forward to a great molecule next, it is pivotal for Ariad. If it fails, Ariad starts to sink under it’s own weight and inability to economically raise cash. Or we get b/o. We need news, big and positive.
The numbers from a bullish perspective were overall unremarkable, save the European numbers. Again, with some patients just coming off free drug in Q2, Q3 will provide a better view of paid patients. Through Q4, the 15mg price will still drag on revs. Q1 and now I think Q2 2015, will be full price, across doses.
Some bright spots, would have liked a lot more.
Drug markets – Europe the bright spot on revenues, in 2015 could pass the US market on pod and maybe revs. Bad news, the delay in France reimbursement probably until 2015 will make $80mm total revs in 2014 a long shot. We needed that $20mm or so to get to the $80mm’s for 2014. Now thinking the $60mm’s range. The optics will have some damage. Also, PRAC decision we now know will very likely be slightly negative. On the other hand, PRAC guiding/forcing lower dosing should help in the long term. Confirmed that repackaging/repricing 15mg will be problematic for Ariad in the large European market. U.S. rev numbers, disappointing. I expected far more.
Patients and Dosing – 15mg shaping up to be a great dose, with not much escalation from that. If only that was the PACE dose; this will haunt the company for several years. Pod number still hidden. Only 75 patients per month tried the drug in May, June. 2013 Pod vs 2014 dosed patient comparison was a stretch. Drops number avoidance raised an eyebrow. Sicker patients now on drug, later phase, 50% chronic, down 10 % points from 60. Guestimate a less than 1:1 ratio of pod:prescribing docs, drops are the issue. Logical strategy to increase ratio. Renewed interest in T315I patients – SURPRISE! I raised this point at the AGM, and it was essentially dismissed. They need to take my other suggestion and scoot up pricing, not just on 15mg.
Trials – ‘113 barely mentioned. Might be sacrificed to raise cash. No new IND Iclusig reg trials in sight, not even GIST. The company is all Iclusig in CML ALL.
Financials – Excess inventory write-off related to either unexpected slower growth and/or 15mg repackaging matter, with a demand now for a 30mg dose. Burn rate at $70mm. I don’t see headcount as a major factor overall, and I think the adds are for the UK and dosing trials. Cash burn is very high and re-emerging as the number challenge. They will burn $10mm in 2014 more than previously guided. We’ll need a cash raise by May 2015. This one could tougher than the last.
AI
