Spectrum Pharmaceutecals Inc (SPPI)

[antihama]

Spectrum gets 81M upfront, 330M in biobucks, IF Pozi is licensed today based on a back of an envelope calculation using the news today that AstraZeneca is handing 1.35 billion upfront to Daiichi and 5.5B in biobucks for DS-8201 if the drug meets certain development and sales milestones.

I base that on the NIH estimate that in 2019 there will be 268,600 cases of BC. Of those 20% will be of the HER2 variety. Pozi, for exon 20 mutation, in the US will have 7,700 (NSCLC) + 8,400 (pan) or 16,100 cases which is 6% of 268,600. So 6% of 1.35B and 5.5B is 81M and 330M, respectively.

You might want to say that you should give a discount to that because pozi will be competing w potential competitors like DS-8201. Then again you might want to give a potential pozi financing deal a premium since it’s not competing w established Standard of Care competitors that have the whole market right now. Thinking about that a little further you might want to give pozi a much bigger premium based on the fact there are no established competitors for patients with the exon 20 insertion mutation whereas w the HER2 breast cancer population you'll be up against SOC i.e. Roche’s Kadcyla or Perjeta, and Herceptin/ Herceptin biosimilar. Geez, make that a much bigger premium after thinking about it. Here's more on the “AstraZeneca pays up to $6.9 billion in Daiichi Sankyo cancer deal”
https://www.reuters.com/article/us-astrazeneca-daiichi-sankyo-cancer-dru/astrazeneca-pays-up-to-69-billion-in-daiichi-sankyo-cancer-deal-idUSKCN1RA04P