Replies to post #105219 on Biotech Values

[skitahoe]

Herceptin's selling about $5 billion and T-DM1 should replace Herceptin almost completely in a matter of a few years after the initial approval. I also believe that Takeda may make more then you're figuring from your analysis of SGN-35, so IMGN should make more over time.

As to the argument about who's technology's best, I've yet to see positive data from SGEN in solid tumors. I also believe that IMGN has many more drugs in trials and coming into trials. Compare the pipelines. SGEN has by far led the PR war, but IMGN has numerous linkers, numerous effector molecules, and moderate success to date with its roughly 15 year old technology in N901-DM1, essentially its earliest version of TAP Technology.

To date it's latest generation linkers and effector molecules have yet to be discussed even in preclinical drugs. It may be years before we really know what their technology can do. I suspect that one reason drug trials have been delayed is to permit partners to try the latest and greatest with their MAB's as all partners have access to the linkers, but only SNY has access to effector molecules other than the DMx family.

Gary

[mcbio]

Re: IMGN valuation

SGEN has been saying total 100% penetration worldwide market value for SGN-35 in the r/r setting is $400M. Assume 50% of that and you have $200M. For T-DM1 to get to even that, it would have to sell $4B. I like the drug, but I don't think it gets to $4B.

As to Dew's net/gross question, working from memory I believe the only outbound royalty is a tiny one for maytansine.

Good to hear that net royalties due IMGN on T-DM1 sales are probably close to 5%. If we can just have reasonable confidence in T-DM1 being a $2B/year drug, that's still roughly $100M/year in royalties for IMGN. That's a nice chunk for a company with a ~$400M market cap even if that revenue stream is a few years off. I do agree with PGS' point about the market probably still wanting to see IMGN have success with some of the other drugs in its pipeline to show that the company is not a one-trick pony. But, it sounds like the company has improved its linker technology in collaboration with DNA and otherwise to give some hope on this front.