AFFY market cap is cash plus one approval milestone. 360,000-380,000 potential patients on dialysis at $9,000 a year is a 3.3 billion dollar market. If they get 10-20% of the market then sales of 330 - 660 million per year. With a 80% profit margin (should actually be higher) profits would be 240-480 million before they split the profits. Before tax that would be $3 per share per year on a 10% market share and $6 per share a year on 20% market share (in the US only for dialysis patients. I believe overseas AFFY would only get a royalty. If approved and post approval milestones then AFFY could get another approx 350 million in milestone (approx $10 per share). Sales might be lower than that because I believe AFFY will price lower than epo.
I think AFFY won't have as much of a pre-approval discount to potential because the FDA sounded very positive on it and had
extensive discussion on how the drug would be sold upon approval
Should have a nice jump tomorrow and then work higher through March next year.
If approved it will be interesting to see if they can get more than 20% of the market share because of a lower price and a once monthly dosing. If so the earnings numbers could be very alrge because
from Affy web site.
As part of the agreement, Takeda paid Affymax upfront license fees of $122 million and purchased $10 million of equity. Takeda also committed to up to $355 million in clinical and development milestone payments across renal and oncology indications. In addition, Takeda funded the first $50 million of third party expenses related to clinical development of peginesatide. Subsequent to that, the agreement calls for Affymax to pay 30 percent and Takeda to pay the remaining 70 percent of all third-party peginesatide development expenses. Each company is responsible for their own overhead and personnel related expenses. Once the product is on the market, the companies will share profits equally in the United States and Takeda will pay Affymax royalties based on net sales of peginesatide outside the United States.
AI
