Biotech Values

[microcapfun]

Albuferon

HGS has been on my watch list almost forever. For what it's worth, I previously assumed a 88.5% chance Albuferon would be approved, with $1B peak worldwide sales if it was approved.

After pulmonary tox was seen at the 1200 mcg dose in Phase 3, I have changed those numbers to 60% (eventually) and $900M.

As has been discussed, 900 mcg is not so far away from 1200 mcg. Metabolism and PK variation between individuals are likely sufficient to make 900 mcg in some look like 1200 mcg (or higher) in others. Furthermore, a higher rate of shortness of breath and coughing compared to Pegasys was seen at 900 mcg in the Phase 2b trial.

Financially, HGS has increased expenses and expense guidance recently. If the Albuferon revenue stream doesn't turn on by 2010, they will likely find themselves with no cash and >$750M debt which won't convert ...

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