The key take-away for me is that Ponatinib got approved, 3-months early, with a broad, second-line label. As far as the label warning goes, have you seen Tasigna's black box label?
WARNING: QT PROLONGATION AND SUDDEN DEATHS "Sudden deaths have been reported in patients receiving nilotinib"
By the way, NVS reported tasigna revenue of $231 million in their most recent quarter; the drug will easily exceed $1 billion in sales next year.
Yesterdays 20% drop was an over-reaction driven largely by the markets perception that Iclusig is going to meet resistance (no pun intended) in a 2nd-line setting. Given the 12-month follow-up data released last week at ASH, I think this risk is largely without merit. In a 3/4 line CP setting Iclusig achieved a 51% MMR compared with Tasigna's 28% MMR in 2nd-line. For Iclusig, the MMR was reached in just 5.6 months(the median duration of response has not been reached). Compared with tasigna, iclusig generates a faster, deeper molecular response in 3/4 line as tasigna does in 2nd. It's not even close.
As far as peak sales go, most analysts are well north of $1 billion:
Cowen thinks "it could have over $1B in revenue at peak."
Maxim projects "global peak sales of ponatinib stay at around $1.3B."
Mike King recently wrote that "even under what we believe are conservative assumptions, we forecast ponatinib sales at $1.9 billion worldwide in FY2018."
Oppenheimer is also forecasting "peak sales of $1.9 billion ($700 million front-line/ $1.2 billion refractory)
>>"What would be a reasonable multiple on that figure, perhaps 5x sales?<<
Sure, 5x is reasonable (although I backed out a 6X multiple from Merrill's report). Assuming $1 billion in revenue, ARIA is worth $5 billion on Iclusig alone. With 168mm shares outstanding, that's right around a $30 price target or 60% upside from Friday's close. Plus you get a free ride on the ALK inhibitor, AP26113 which, btw, Merrill is already valuing at $11 a share.
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