thealias - great question and one I think about all the time.
I thought through this and provided some targets (SWAG, of course...) below, but first - attaching a link that is very helpful in understanding how the Oncology world is shaping up from a sales opportunity perspective.
When considering what Peregrine can turn into, there are so many variables to consider that a proper analysis would take days and require quite complex assessment of many conditions. Lots of unknowns...
I divide this to two separate groupings, aligned with your suggestion of 'Conservative' and 'Pie in the Sky'.
Conservative - product sales range figure of $4B to $6B peak and a 2-4 year persistence in the 80% to 100% range of peak. Peak would be reached about 18 to 24 months after introduction to market provided the two big cancers (NSCLC and Breast) are approved and within a relative short time of one another.
Peregrine's cut - at best around 30% to 40% of sales assuming partners are responsible for providing all sales & marketing activities ++.
Company Valuation - typically 4 - 6 times sales so we can go with $10B mid point average. This includes the 35% cut of sales in the multiplier as Peregrine will not be valued on product gross sales of which they will get only a portion. Could go as high as $20B if market is euphoric about the product but it is still approved in limited indications.
Assumptions and Anchor Points * Product is approved in combos for Lung and Breast Cancers by mid 2017 * At least one PD-1/PD-L1 combo is in play * Bavi is not a stellar performer but definitely brings value * Bavi gets replaced/superseded within 4-6 years of launch by greater efficacy products * Beta Bodies do not show up on the radar on time to boost future value of Peregrine in market's eyes * Bavi is not a major hitter across most cancers and ultimately is effective for 3-5 types of cancers * Costs to patients/payers are not additive. Can not start charging $20K/treatment for a doublet or $30K/treatment for a triplet. Combining products will result in lower price point for combo than individual items separately * BPs will push the combo with Bavi due to its efficacy and value for the benefit of patients and as opposed to drive sales towards in-house developed combos * Oncology market hits $130B by 2018 and goes up 10% annual from there * Peregrine will be willing to partner and give a cut or portion of the company away to complete a deal. Holding off for a figure that does not align with the impact of Bavi (assuming limited application and short list of cancers) will leave Peregeine (and us) in a losing position. Value will be understood once data starts to come from human clinicals and heavy hitters like MSK and Astra
Pie-in-the-Sky - product sales range figure of $30B to $40B peak and a 6-10 year persistence in the 80% to 100% range of peak. Peak would be reached about 36 to 48 months after introduction to market provided the multiple big cancers (NSCLC, Breast, Gastric, Melanoma, etc.) are approved and within a relative short time of one another. Beta Bodies are proven by 2017 and accelerated into market by 2018-2019
Peregrine's cut - at best around 50% of sales assuming partners are responsible for providing most sales & marketing activities ++.
Company Valuation - typically 4 - 6 times sales so we can go with $80B mid point average. This includes the 50% cut of sales in the multiplier as Peregrine will not be valued on product gross sales of which they will get only a portion. Could go as high as $100B if the Bavi & Beta Bodies product platform market is a stellar performer across many disease categories including Oncology, Infectious Diseases and more.
Assumptions and Anchor Points * All cylinders firing at once and on nitro-methane... This prediction calls for 15% to 20% of total Oncology product sales which is not at all likely nor precedented in the present or future. It also requires broad application outside of Oncology to ever have a chance to get anywhere near there * Product is approved in multiple combos for multiple cancer indications by mid 2018 * Multiple PD-1/PD-L1 combo are in play as are Chemo and Radiation combos * Bavi is a significant performer clearly additive to many oncology therapy types * Bavi and Beta Bodies work very well and Beta Bodies efficacy and breadth is greater than Bavi * Combined span of relevance of Bavi and Beta Bodies is 6 - 10 years * Bavi is a major hitter across many cancers and together with Beta Bodies becomes broadly used and well applied in the industry * Costs to patients/payers are not additive. Can not start charging $20K/treatment for a doublet or $30K/treatment for a triplet. Combining products will result in lower price point for combo than individual items separately * BPs will push the combo with Bavi due to its efficacy and value for the benefit of patients and as opposed to drive sales towards in-house developed combos * Oncology market hits $150B by 2018 and goes up 10% annual from there * Peregrine will be willing to partner and give a cut or portion of the company away to complete a deal. But over time, it will also grow sufficiently to buy organizations that can complement its capabilities and strengthen its breadth.
My guess is the company will be bought out and peak somewhere above the low point but well below the pie in the sky as growing a Peregrine size/capacity company to become a BP is a near impossible task in the 5-10 year timeline, while having a good offer to send everyone to the golf course fat and happy is a much more likely scenario with deep pockets and power. IN terms of likelihood of becoming a $100B+ company - there are very few and they are playing in a wide variety of therapeutic areas.
All the above purely speculative and based on a mix of analytics and gut-feel from being deep in industry. In addition - very important to understand that today's product lifecycle, where any given product is relevant and SOC, is much lower than it used to be based on the focus, brain power and financial resources being thrown at Oncology. Nothing will be a 20 year drug like some products have been from the 70's, 80's or 90's.
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