CJ-- Amazing Cotara find. Thanks so much. Lytle’s ’08 comments fit perfectly with what my friend was told at NYC conference. Also fits with why they always seem to publish major Cotara data at a Conference of Neurological Surgeons like the one last week.
It’s a very smart move for the Company to put off Cotara BP negotiations until next summer/fall when the FDA registration pathway meetings are complete. Assuming the balance of the data comes in even half as good as the 86 week median OS seen in the first 14 patients, the FDA should give them either accelerated approval or approval to do a fairly small, low-cost Phase III.
Knowing the registration pathway, especially if its accelerated approval or a low number of patients, will give the Company great leverage in negotiating a traditional BP license for a large up front fee and a substantial royalty.
My understanding (confirmed by what Lytle’s ’08 comments) is that the marketing cost of selling to the 100 or so U.S. nuclear medicine facilities run by neurosurgeons would be quite low compared to the traditional cost of penetrating the oncology market and getting oncology docs to switch away from their favorite product.
This is what Lytle meant in ’08 when he said: “In order for a patient to receive Bexxar or Zevalin, the medical oncologist literally has to hand the patient away to the radiation oncologist and the economics are taken out of the equation.” Translation: you can’t get oncologists to give away revenues to the neurosurgeons if the oncologist is the one administering the drug.
But if Bavi becomes the SOC, it will be the neurosurgeons who oversee the therapy and get the big fees. This is why SK pointed out to the Reuters reporter on Oct 18 that “He [SK] explained that a radiation/oncology group is involved in delivering the drug, but patients are being overseen by a neurosurgeon.”
The neurosurgeons would be just delighted to take the GBM therapy revenue stream away from the oncologists, and this is why Cotara data is always presented at the meetings of the Congress of Neurological Surgeons. It’s a small group and an easy one to market to.
The low cost of penetrating the neurological surgeons market will greatly enhance the value PPHM receives from BP for a GBM license. This same low marketing cost, if combined with FDA accelerated approval (i.e. patients pay the cost of our Phase III study), means the Company could have the leverage to tell BP they will market Cotara on their own if the don’t get a fair price.
This is the type of leverage you want going into a major negotiation. As much as I dislike the wait and all the intervening ATM sales, it was a very smart move to put off Cotara negotiations until the FDA registration pathway is know.
Happy Halloween.
AI
