Understood. Thank you. As a start, what I have done in the past for other drugs is attempt to determine what exclusivity in the U.S. for that drug may mean. In other words, I suppose you may use for comparison the sales of Donepezil in the U.S. to estimate what the sales of AVXL 2-73 may mean for Anavex in the U.S. alone. You may add other countries or continents (Europe for example) to that calculation after that, but I think starting with the U.S., the most lucrative market, makes sense.
The global Donepezil market is valued at 920 million US$ in 2018 and will reach 880 million US$ by the end of 2025, growing at a CAGR of -0.6% during 2019-2025.
North America is the largest consumption region of Donepezil, with a sales market share nearly 37% in 2017. Europe is the second largest consumption region of Donepezil, enjoying Sales market share nearly 29% in 2017.
Donepezil was developed by Eisai and Pfizer and is sold as a generic by multiple suppliers. Remember, however, that Anavex 2-73 will not be sold as a generic for the period that Anavex has exclusivity. Therefore, AVXL 2-73, if approved, will have sales in excess of the generic suppliers of Donepezil. Once a brand name drug goes generic, the price of that drug may drop as much as 80%.
Sales of AVXL 2-73, if approved in the U.S., may conservatively be estimated to be $350-$550 million. Sales in the U. S. and Europe upon apporval may conservatively be estimated to be $550 million to $1 billion. $1 billion is considered to be blockbuster status. Of course, all of this is conjecture, and it depends on the efficacy of the approved drug. However, my rough calculations are for AD alone. If AVXL 2-73 is approved for multiple uses, sales of the drug should exceed $1+ billion.
Total profits on brand-name drugs are higher than generic drugs, as companies retain exclusivity for a certain time period once the drug is approved by the Federal Drug Administration. Profit margins vary. According to an old WSJ article that I do not have the citation for: “At the manufacturer's level, prescription drugs can be enormously profitable for makers of both branded and generic drugs. Although gross profit margins vary widely, branded pills can have a margin of 90% or higher at the manufacturer's level, while generics can have gross margins of 40%, analysts say.” If we assume evenutal sales of approved AVXL 2-73 in the U.S. and Europe to reach $1 billion and a 75% profit margin, Anavex would conservatively obtain profits of $750,000,000.
If we further assume that Anavex has 100,000,000 shares outstanding at that point (roughly double what it has now), that would mean a profit of $7.50 per share. If we assume a price earnings ratio of 10 for Anavex, that would then provide a price per share of roughly $75.00. I caution everyone to not rely on this very speculative calculation. The assumptions made here may not turn out to be true. Even if something like this turns out to be true, it will occur, if at all, in the future — meaning it could be years in the future. I doubt that many “traders” or “investors” are willing to endure the ups and downs of Anavex over a number of years. Therefore, most shareholders will never realize much, if anything, in the way of a return on this company even if the company is able to gain approval. An investment in Anavex bears an extremely high risk, and I have no idea what the chances are that it will ever be successful. Any investor in Anavex should be prepared to lose all money placed at risk.
