Replies to post #198062 on Biotech Values

[DewDiligence]

EGRX/TEVA—Notes on FDA approval of Bendeka:

• TEVA, who controls pricing and marketing of Bendeka, plans to implement a “hard switch” from Treanda to Bendeka, so Bendeka figures to be a big-selling drug. (Annualized US sales of Treanda are $600M.)

• EGRX gets a 20% royalty on Bendeka sales; the royalty rate, which had previously been described merely as “double-digit” is set forth in a separate PR from EGRX today (http://finance.yahoo.com/news/eagle-pharmaceuticals-achieves-milestone-receive-120700193.html ).

• EGRX is also entitled to $75M in additional Bendeka milestone payments from TEVA: $15M for the product launch, $30M for obtaining a unique J-code from CMS (to enable reimbursement at a premium price), and $30M in sales-based milestones.

• Bendeka is eligible for 7 years of US marketing exclusivity by virtue of its ODD for CLL/NHL; however, the FDA has to explicitly confirm the award of ODD marketing exclusivity in a separate decision from today’s approval for marketing.

• EGRX plans to launch “big bag” generic Treanda on 5/1/16; the business rationale for EGRX’s wanting two Bendamustine products on the US market is laid out in #msg-118558328.