Muchogusto, IMHO, Spectrum is worth way(way) over $100/share. Let me give you an example and you’ll see why.
Per Spectrum’s Presentation, there are 7700 NSCLC EGFR and HER2 combined patients who could take pozi. Fifty-eight % of those have the NSCLC EGFR exon 20 mutation (cohort 1 in the Zenith 20 trial) or ~5000 patients. At $200,000 per treatment (Loxo's Vitrakvi is $400,000/year), that’s $1B. Say due to competition which I don’t think was that impressive (TAK-788; see post 2596) only half the patients take pozi but that’s still $500M. I’m assuming a duration of treatment of 8 months which brings the revenue to $333.5M. What MV multiple do you want to give that? I’d say between 6x (i.e. NY School of Business annually calculated multiple for all biotechs i.e. growing and nongrowing biotechs) or do you give it a multiple for a growing biotech let’s say 12x. At 6x the MV is 2B and at 12x (Note -I've seen higher) it’s 4B (or $36.4/Sh assuming 110M sh outstanding). A year later the previously treated NSCLC HER 2 exon 20 mutated treatment should be approved and another 2700 patients would be eligible for treatment. Let’s assume just half of those patients will do pozi and the other half will be treated by the competition (I.e. DS-8201) assuming 8m duration. I’m not going to do the math but that looks like another $20 added to the share price or combined, the share price is in the $56/sh range. Assuming the basket trial is successful (no reason to believe otherwise) that will more than double the # of patients having the EGFR or HER2 mutation so say it will add another $60/sh or a combined share price ~$120/sh. A couple of things to note about these calculations. When I say competition will affect pozi sales, well that’s true and not true and that’s because after the patient takes the competitor drug what are they going to do? And that is take pozi, it just that since they are less healthier patients, they’ll take it for say 4m instead of 8. So you’ll still be capturing those patients. And if if pozi gets approved in 1st-line patients they’ll be on pozi longer 1 yr? 2 Yrs? which will bring in greater revenue. You get the picture.
And we’re not even talking Rolontis here. Coherus's Neulasta biosimilar UDENYCA sales ~37M in 1st 3 months of sales, so you got to figure Rolontis sales will be in the 2 to 500M range (post 2580).
So I guess the answer to your Q is “Time is on our side; it won’t be long”
A patient Long
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