"I certainly hope you are right. That would be fantastic growth and you make a good case for it. It's quite possible the market hasn't figured this out yet. If you are right, shouldn't Halo's market cap be at least $2B just on the basis of Enhanze? The only legitimate concern is a certain lack of visibility. When will Herceptin and Mabthera become obsolete and what will replace them?
Can we get to $200M in royalties in 2020?"
Well, I am not trying to make a case or convince anyone of anything. I believe most if not all I stated is verifiable through research of public records of Roche, Baxalta, Halo and some google searches. The assumption that launches and conversion % will continue for at least two years is fair and safe imo.
Look at Halo guidance for 2016. Where is that additional $40-$50 million coming from?
Based on what I have read, market cap = 5-7 * revenue so $625-$875 million. My concern is the continued de-risking of PEG and where the big money lye's for Halo.
I think there is visibility for MabThera/Herceptin. Several big pharma want a biosimilar and willing to spend the money. Roche is willing to spend the money to protect. Roche still initiating clinical trials. Sales still increasing and should have years of sales after decline starts. Roche is attempting to replace MabThera as SOC but Herceptin gained new life with clinical results paired with Perjeta. Roche has since switched gears and added clinical trials for Herceptin SC.
When will Herceptin/MabThera become obsolete? I have no idea but I can say with some certainty, not in the next two years. We do have partners with some impressive candidates in the pipeline.
Thoughts on 2020? Baxalta gave guidance of around $1 billion HyQ sales. Would have to look it up for exact projections since the memory is not what it used to be. imo Herceptin SC will still be going strong, MabThera SC may be declining. Doubt any new royalty streams by then. $200 million royalty in 2020 doable? Absolutely. Will it happen? No idea.
Halo will live or die based on PegPH20. Enhanze is only the enhancer of the story.
Good Luck with your investments!!!
Never argue with a fool, for after awhile, it becomes difficult to determine which is the fool.
