Replies to post #122758 on Biotech Values

[mouton29]

Re: How will Xarelto/Eliquis/Pradaxa affect US Lovenox sales?

This analyzes the effect on the overall market, but SNY/MNTA has a proportionately larger share of the retail market and a smaller share of the hospital market, so the effect on them may not be strictly proportionate. Of course, they could change their marketing strategy.

Also, it would appear that a reduction In overall market size could remove or at least mitigate the capacity constraint currently limiting SNY/MNTA. Not clear what effect that would have.

[Regulardoc]

Dew, thanks for your comprehensive analysis. In Paragraph A, you mention Lovenox's "lower cost." Have you seen anything related to the cost of Xarelto? If used for 35 days psot-op, there may be significant total cost, but I am guessing that the daily dose will be priced much lower than a daily dose of enoxaparin. The pharm companies may have a dilemma on their hands with the pricing. Article the other day on Bloomberg mentioned that the market share for Xarelto for DVT prophylaxis for present indication may be $100 million annually, while if later approved for Afib, the market may approach $2 billion. To compete in the Afib market, they will have to price Xarelto comparable to Pradaxa for a total daily cost, whereas, for the present indication, if they were to price Xarelto near the Pradax cost, they will be leaving "money on the table." If stuck with their present indication for a period of the time, they could actually undercut Lovenox/m-enox by 20% initially, and once they receive an indication for Afib, they could drop the price to compete with Pradaxa.

[DewDiligence]

Matthew Dodds, a pharma analyst with Citi, expects Xarelto to generate US peak sales of only $100M in the hip/knee indication (http://www.bloomberg.com/news/2011-07-01/janssen-says-fda-approves-xarelto.html ).

I think Dodd’s figure is much too low; however, if Dodds is even close, it’s bullish for MNTA and makes my analysis in paragraph A) of #msg-64848575 very conservative.

[urche]

Anticoagulant market analysis

DEW, outstanding work on your analysis and you amaze me with your memory that this thread warranted follow up.

I agree with your analysis and assumptions, except for two points, one of which is trivial, and the other perhaps more substantive.

First: A) Primary VTE prevention following hip/knee surgery.
I predict that the orthopedist mind set will prefer to stick with one drug for both inpt and outpt setting. Since most of the post op care and risk of DVT occurs post discharge, I predict we will see an oral drug (i.e. Xarelto) with reasonable safety profile and comparable efficacy to either warfarin or enoxaparin take the lion's share of the prophylaxis market. To make a guess, I would estimate enoxaparin could lose 50% of the inpatient post op prophylaxis market share (vs. 20% in your model).

Second: D) Acute VTE treatment
I disagree with your assertion:
acute DVT treatment is exclusively a hospital-based indication, and hence the advantages of Lovenox cited in A) — its longstanding safety record, lower cost, and injected formulation — should enable Lovenox to compete effectively against the oral competition in this indication.

Already we are seeing many leg DVTs diagnosed in the ED and discharged on enoxaparin that is administered by the patient, family member, or a visiting nurse. Even pulmonary embolus has some data indicating some patients can be managed as an outpatient similarly. In these cases, the plan is usually to use enoxaparin as a bridge to warfarin. Even though I think we could be seeing an increasing trend to outpt treatment of DVT, I don't this as strongly bullish for the newer anticoagulants or strongly bearish for enoxaprin, because I think clinicians and patients are going to have a tough time giving up the comfort of a drug such as time-tested warfarin that can be monitored by blood tests. Especially for a disease that is considered acute and life threatening, this is going to to be the gold standard until we have more head-to-head trials that convince clinicians that the newer drugs are the wave of the future.
So, in summary, I don't see my views affecting your model figures for acute VTE treatment substantively.

Thanks for your good work,
Urche