ClockedProtector here are my “better late that never” responses
I've read your splendid report and am very interested in the part relating to Cotara for now because I like to focus on the more short term potential of Peregrine which probably lies in Cotara.
Thank you…
What I would like to contribute, in response to your request for input and comment, are the following things.
If you are looking for a research cost for Cotara I would simplify the model and take the current value per share (a negative value at this moment) which should represent the total cost of everything and apply a ratio. I think the revenues can be neglected, even considering the military revenue. We can and must assume that Cotara, Bavi and Avid will have to pay for the full monty and therefore, no matter whether there is some extra cost of the past, will each have to take a portion of that for their account. It will be an estimate and it will be some off but very probably not from the order to undermine your end results. If we look at the ration of trials in Bavi compared to those for Cotara then I think Bavi (you called it the big enchilada) should carry more cost. Would 30% for Cotara be a reasonable assumption?
I’m not quite sure I understand.
I find the assumption of a 50% market share quite optimistic. The reasons is the affordability of the treatment and the market penetration time. Many people in the US and at least 200 Mill in Europe do not have the Social Security coverage and must fall back on Health Insurance, own money, loans or 3rd party help or simply on nothing at all and die from the condition. I would therefore cut the potential market in 2 and say that 50% of the cases can afford the Cotara treatment. Peregrine will never, not even with extensive networking or with a partner tap into 50% of these at once. They have the orphan drug protection and a de facto monopoly but the machine has to start up. I think 10% the first year, 20% the next and 30% the 3rd year would be a good model giving them plenty of room to then work towards that 50%.
You make some very good points. The LTC report did in fact assume an “initial adoption rate of 25% with an assumed royalty rate of 20% from a marketing partner (or partners).” I also, am not familiar with the individual member nation’s health care policies within the E.U. The current attempt was to consider the broader question of “The potential market cap allocated to PPHM for a successful first line GBM treatment” I think that there will be time within this year to refine and correct any formulas. Last year I considered the possibility of creating an Excel spreadsheet with imbedded equations that would allow me to change any value (Assumption) or tweak any part of the formula and get an instant new result…Maybe this year…!!!
Then there is the $20000 price setting. From the LTC report I concluded that that was the price from the drug alone but after reading your report, and re-reading LTC, I kind of doubt and wonder if Peregrine is saying really that $20000 is an all in price (incl. hospital stay, surgeon fees, re-validation, after care, etc) or all in Cotara price (Production + special delivery for radio active product). If it's not that later case then Peregrine will only have a few thousand dollar per treatment, or the estimated/assumed 20% thereof with a partner. I also am under the impression that as well in the US as in Europe Brain Surgery, even if limited to a small skull opening and catheter insertion without cutting), followed by a 25 hour infuse of a radio active product with intensive monitoring is not a small operation. That plus multiple days hospital stay and the after care, plus Cotara manufacturing and distribution, would eat away a serious part of that 20000$, wouldn't it. Is there any better information about this around?
Again you make some very good points. Addressing your first point, the ~$20K price for Cotara. I re-read the section in the LTC report again and can understand the confusion. They used the term “treatment” if treatment included all of the items in your first interpretation then there would not be much value to be garnered. I made the assumption that the $20K was the price for, as you put it “Production + special delivery for radio active product”. In addition the price is in line with other mab’s such as Avastin, Erbitux, Herceptin, etc. I also backed into their (LTC) numbers by using the table on pg 33 and their assumptions and arrived at the same $20K per patient. I would like to add that pricing of anything that is being sold is based on a myriad of factors. I don’t think that management at this early stage has a clear picture. When/If Cotara is partnered the partner’s marketing team will try to find the sweet spot. In reference to better information…I wish I had it. Perhaps your questions will stimulate more research from some members of this outstanding board.
I also think, given the preliminary trial reports and the median survival times that you may assume that patients will have/need more then one treatment. The patients that can afford the first treatment and will have seen it at work will be very motivated for a second one and are already in the group that could afford the treatment, so low fall-off to be expected. Of course this second treatment would on average be 81 weeks after the first one and would only start to impact your calculations about 18 months after kick-off.
This is more a question for the medical people on this board. My background is in engineering. I would hope, for the patients involved, that one treatment would suffice.
About that kick-off. In your report you kind of calculated a regular Phase III trial cost and related execution time. I know for sure that the FDA does not work with percentage of the occurrence and that many trials seem to enlist 1000 to 3000 patients in a regular Phase III. I assume the quality of the safety design may come in line to pick the amount needed.
As I stated in my last analysis “My only experience in the area of statistical analysis is in reference to manufacturing and quality control. That experience consisted of using the reliability and quality control departments for their inputs when I needed to cost out a project. I’ll do my standard SWAG and say that a 1% sample size for clinical trails is reasonable. (Comments from the medical guys…???)” That’s why I asked for input from the medical guys. Do you have any knowledge on this subject? FWIW I agree that safety factors are one of, if not the most important factors in any trial. Perhaps your questions will stimulate further discussion on this subject.
Now, to be corrected by anyone on this board that went trough a Phase III+Fast Track or is knowledgeable about it, isn't it so that when a fast track is granted the applicant (and only the applicant) may start bringing the drug to the market (charging for it) and that reporting, complaints, etc are going to the FDA how monitors and can recall during a given period before entering definitive approval to enter Phase IV (the later field evaluation reporting).
I think that someone addressed that question already…I think that the answer is no. Any partner or entity that bought PPHM could market it…Good Grief…Golf is killing my memory cells…!!!
Two final notes:
1- Thank you for your participation in this discussion, perhaps it will inspire fellow members of this board to do some research in the areas that are lacking.
2- My apologies to RRdog for not commenting on your very lucid first post. We seem to have very similar views on the company and management. In my standard “Molasses Like Speed” I will respond/comment…I also have a request. If you/your firm have performed an analysis of the potential in PPHM could you please post it?
Regards
Golfho
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