Elite Pharmaceuticals Inc (ELTP)

[WeeZuhl]

So who are the new patients going to be for ELI200?

Very important question. This is one of the reasons I was very happy to realize ELI-200 = OxyIR. Yes, the big money scripts are for the big milligram extended release formulations. But most of these patients are on stable regimen and not likely to switch right away just because ADF is available, and if they did switch, it would not likely be to an IR formulation.

But as we have discussed many times before, 91% of opioid prescriptions in this country are for IR formulations. Many of these are one time scripts written by ER for an acute injury. Since they do not know the patient (or sometimes because they DO KNOW the patient), they would much prefer to write for #20 SequestOx instead of #20 Percocet. ER docs will be the earliest adopters. Doesn't take too many docs prescribing #20 SequestOx on regular basis to get to NASDAQ. Approximately 40,000 ER docs in the country (2000 new ones per year, good targets!). If we convince 10% to use SequestOx, let's say 10 scripts of 20 pills each per week:

4000 docs x 10 Rx's/week x 52 weeks x 20 pills/Rx= 41,600,000 tablets of SequestOx per year. Let's say a conservative $5/pill, that would be revenue >$200,000,000/yr just from 10% of ER docs writing 10 scripts/week. Add in pain mgmt, PCP's, NP's, PA's, etc and you're easily supporting multiple dollar share price even using conservate EPS ratio and accounting for the cost of revenue. Notice this has absolutely nothing to do with "the pop" after approval. Just revenue.

I also believe there will institutional involvement. For instance, large health systems may mandate that their physicians prescribe an ADF. When ADF version of OxyContin replaced nonADF version in 2010, OxyContin prescriptions fell by 33% the next year. Even though ADF may cost more per pill, these large systems may see cost savings, possibly due to fewer scripts and fewer complications of opioid therapy, but also possibly because there may be Medicare rules which improve reimbursement for better care, potentially when safer ADF opioids are used. (Similar to using ACE-inhibitors to prevent nephropathy in diabetics).

The gist is this: it may be difficult to steal market share from established ER/LA opioids, but it does not take very many prescribers writing for #20 SequestOx to get to NASDAQ.