The value of Cotara…
Per cjgaddys’ recent post concerning the market potential for the GBM medical therapy
According to this 2008 paper, “the U.S. market potential for this indication [GBM] is expected to exceed $200mm annually.”
According to this 2007 paper, “the global market potential for GBM medical therapy is estimated to be worth $700 million.”
Deals can take many forms; to try to determine the final form/forms and try to determine how many partnering deals would be impossibly for me, and may not be very important for this exercise.
Using these numbers and assuming that PPHM wants to partner Cotara and not go it alone; and further assume that there will be three regional deals (USA, Europe and Asia/And everyone else)
Now for the time frame…Dr Garnick…If I remember correctly…Said that Cotara could receive accelerated approval from the FDA…If my memory serves me correctly…within a 2.5 year time frame…Now, would that be for second line treatment only? Do we need to complete a PIII trial before first line treatment is approved? How long does it take for the other agencies to approve Cotara for their area?
The following is pure conjecture on my part. I’ll assume that PPHM at some point in the future…Will make a partnering deal for Cotara. I think that management would like to make several deals to maximize the return to PPHM. I would think that the people that management have been talking to would like the whole enchilada…
Now…A while back…When we were dealing with R & R…Rem…Dropped a number like 30-40M for Cotara…cjgaddy; can you dig up something on that?
It seems that management walked away from that…At that time many were complaining that management should take any deal in order to move on.
So lets see…And here again, I’ll need a little help.
Partnering deals seem to me to fall into a pattern where the partner provides resources for the trials i.e. money, expertise; those resources could cover the complete cost of the trials or some percentage of the cost. In addition it appears to me that there is an inverse ration between the amount of upfront money and the residual royalty that is paid.
So I’ll pick a completely arbitrary pattern and SWAG this with…The partners provide most…not all…of the money to complete the necessary trials and pays a 10-15% royalty on sales. (Any comments?)
Now for the fun part…
In the time frame of 2.5 years and 5 years Cotara could be approved worldwide as the first line…SOC for GBM…
With a “global market potential of $700M” annually and to be conservative I assume only a 50% market penetration and the lower royalty of 10%, that would represent a $350M annual income to the partners…and a $35M annual income to PPHM.
You pick your favorite P/E
10…?...$350M enterprise value for Cotara alone…
15…?...$525M enterprise value for Cotara alone…
Soooo…Maybe management was correct in walking away from R & R
WOW…I’m beginning to sound like Froot-loops…
Isn’t it time for a PKelly sighting…???
I have to go now…
We’re heading out to a Marti Gras party later and my wife wants me to get started…
Regards
Golfho
