Have you not heard of Opdivo? Don’t you know it’s in PHASE 3 trials with Enhanze?
It’s one of the largest franchises out there and projected to grow in sales to $11.6 million by 2026. Even if SC market is only 50%, this will translate to $232 million in royalties to Halozyme.
Opidivo combined with Phesgo, Faspro and Efgartogimod will easily exceed $1 billion. The rest of the programs already in trials will be icing on the cake.
If SC Efgartigimod is approved (which I think is likely), Helen has good reasons to be bullish since Argenex has done some studies and expects conversion to SC to peak at 70%. But the SC formulation is expected to be approved at the end of 2023 for only one indication -- Myasthenia gravis. Eventually, it will probably be approved for six indications but initial ramp is expected to be slow:
"We moderate initial efga ramp, but model higher peak sales potential: We have revised our forecasts to reflect slower initial ramp, given a J-code for reimbursement isn’t expected until Q3’22. We now model efga achieving $100m sales in 2022, and $400m in 2023. Longer term the slower initial ramp is more than offset by our higher pricing assumptions, driving peak potential sales of $5.1bn across the six disclosed indications (prev. $4.3bn) in 2033."
Even Darzalex has taken more than a year to get to a 70% conversion in US (60% ROW) so I think a very bullish best case scenario would be 70% in 2027. Not sure about consensus but I've seen estimates of $2B for all indications in 2027. Will SC be approved for all indications by then? If so, royalties should be $56M in 2027, and assuming no step downs, they should grow significantly from there.
Opdivo is a pretty old drug that is struggling in a very crowded space (Tecentriq is one of its competitors) where Keytruda dominates (see chart below).
Also, time of infusion for both Opdivo and Tecentriq is between 30 and 60 minutes. The benefit of the SC formulation is not nearly as dramatic as with Darzalex and even less than with Herceptin and Mabthera so I think the market is pretty skeptical. Ramp for SC Herceptin and SC Mabthera was painfully slow (see chart below) so I'm not sure what makes sense to project for SC Opdivo and SC Tecentriq. And it's even hard to guess whether they will be approved in 2024 or 2025. And Opdivo's patents begin to expire in 2028 so biosimilars won't be too far behind.
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