golfho, I've read your splendid report and am very interested in the part relating to Cotara for now because I like to focus on the more short term potential of Peregrine which probably lies in Cotara.
What I would like to contribute, in response to your request for input and comment, are the following things.
If you are looking for a research cost for Cotara I would simplify the model and take the current value per share (a negative value at this moment) which should represent the total cost of everything and apply a ratio. I think the revenues can be neglected, even considering the military revenue. We can and must assume that Cotara, Bavi and Avid will have to pay for the full mounty and therefor, no matter whether there is some extra cost of the past, will each have to take a portion of that for their account. It will be an estimate and it will be some off but very probably not from the order to undermine your end results. If we look at the ration of trials in Bavi compared to those for Cotara then I think Bavi (you called it the big enchilada) should carry more cost. Would 30% for Cotara be a reasonable assumption?
I find the assumption of a 50% market share quite optimistic. The reasons is the affordability of the treatment and the market penetration time. Many people in the US and at least 200 Milj in Europe do not have the Social Security coverage and must fall back on Health Insurance, own money, loans or 3rd party help or simply on nothing at all and die from the condition. I would therefor cut the potential market in 2 and say that 50% of the cases can afford the Cotara treatment. Peregrine will never, not even with extensive networking or with a partner tap into 50% of these at once. They have the orphan drug protection and a de facto monopoly but the machine has to start up. I think 10% the first year, 20% the next and 30% the 3rd year would be a good model giving them plenty of room to then work towards that 50%.
Then there is the $20000 price setting. From the LTC report I concluded that that was the price from the drug alone but after reading your report, and re-reading LTC, I kind of doubt and wonder if Peregrine is saying really that $20000 is an all in price (incl. hospital stay, surgeon fees, re-validation, after care, etc) or all in Cotara price (Production + special delivery for radio active product). If it's not that later case then Peregrine will only have a few thousand dollar per treatment, or the estimated/assumed 20% thereof with a partner. I also am under the impression that as well in the US as in Europe Brain Surgery, even if limited to a small skull opening and catheter insertion without cutting), followed by a 25 hour infuse of a radio active product with intensive monitoring is not a small operation. That plus multiple days hospital stay and the after care, plus Cotara manufacturing and distribution, would eat away a serious part of that 20000$, wouldn't it. Is there any better information about this around ?
I also think, given the preliminary trial reports and the median survival times that you may assume that patients will have/need more then one treatment. The patients that can afford the first treatment and will have seen it at work will be very motivated for a second one and are already in the group that could afford the treatment, so low fall-off to be expected. Of course this second treatment would on average bee 81 weeks after the first one and would only start to impact your calculations about 18 months after kick-off.
About that kick-off. In your report you kind of calculated a regular Phase III trial cost and related execution time. I know for sure that the FDA does not work with percentage of the occurrence and that many trials seem to enlist 1000 to 3000 patients in a regular Phase III. I assume the quality of the safety design may come in line to pick the amount needed.
Now, to be corrected by anyone on this board that went trough a Phase III+Fast Track or is knowledgeable about it, isn't it so that when a fast track is granted the applicant (and only the applicant) may start bringing the drug to the market (charging for it) and that reporting, complaints, etc are going to the FDA how monitors and can recall during a given period before entering definitive approval to enter Phase IV (the later field evaluation reporting).
If this would be confirmed it changes your complete calculation in a positive way, money wise, time wise and if applicable partner negotiable wise.
Please consider the above as 'question wise statements' because regulation is a complex thing by times.
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