Replies to post #163344 on Biotech Values

[poorgradstudent]

and the third is the projections on Nexxar, Kyprolis and their royalty from the PFE drug.

I know you know this, but for readers trying to put together a value we have to add Stivarga to the mix of ONXX's revenue.

[poorgradstudent]

ONXX:

the second is the savings that can be wrung out of the combined company in both SG&A and R&D (ONXX is not exactly lean)

Sorry, i should just put all my comments together into one post rather than working bit by bit...

But I think this second point is the most significant. In a sense ONXX isn't a lean company insofar as spending/costs, but in another sense it is a rather lean company. For Stivarga and Palbociclib they just sit on their hands and collect money. For Nexavar, it's very much similar since Bayer does most of the work and the remaining clinical development for Nexavar is basically a breast cancer trial that is all accrued and waiting for results. In essence, the majority of the cost associated with Stivarga, Palbo and Nexavar can really be cut to the bone by a larger company.

With an ONXX purchase, the only thing the suitor really needs to work on is Kyprolis development along with oprozomib development. And even for Kyprolis, the important trials are already under way.

So 3 drugs with revenue streams, 1 more to surely come online barring a catastrophe, with only one of those drugs requiring a clinical development plan. Not a bad situation to buy into.