Spectrum Pharmaceutecals Inc (SPPI)

[antihama]

Spectrum gets 162M upfront, 660M in biobucks, IF

Previously I came up with:

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.

Many back of the envelope permutations on calculating licensing deals but the one that stares me in the face is assuming that all 268, 600 cases of BC patients will take DS-8201. Currently, there is a well-established Standard of Care that DS-8201 will be competing against i.e. Roche’s Kadcyla or Perjeta, and Herceptin so instead of assuming 100% of the market let’s say DS-8201 can fight for say 50% of the market. Not only that but a Herceptin biosimilar will also be in the mix. So we assume the same # of pozi patients, or 16,100, but we cut the total population of BC patients (268,000) in half, or 134,000. Now pozi’s patient population doubles to 12% of DS-8201’s. So in comparing it to AZs deal, you would get 162M upfront, 660M in biobucks if pozi’s licensing deal would be comparable to the DS-8201 licensing deal. Again, these are back of the envelope guesstimates but it’s fun to see the potential value of a licensing deal.

Other stuff you can throw into these calculations is percentage of metastatic BC patients DS-8201 will be competing for initially, how much will DS-8201 compete w pozi for HER2 ex20in mutations, how will combo trials affect efficacy, etc