Ok last of this series of posts of interesting snippets from the recent Merck R&D day. See below for commentary and slides regarding their unique monoclonal antibody program for C. difficile associated diarrhea (CDAD). Important for those who follow Optimer OPTR and Cubist CBST, among others. I am working on a more complete analysis of the prospects for this MK3415A program, which is currently in phase 3 development.
- CBST is partnered with Optimer Pharma $OPTR to promote Dificid.
- Check out the complete schedule of Upcoming Events with links to my notes.
- Here are my notes from the webcast:
- Cubicin: 1.3m patients treated to date
- new Orange Book patent listing - important because teva exclusive supplier arrangement goes thru end of last OB patent expiration
- cxa-201: if approved in all targeted indications it would reach >$1b sales with single digit market share
- '315 CDAD phase 3 program will begin 1h2012. if successful, investment will generate IRR of >25% [I got this one wrong...thought they would kill the program]
- gross cubicin revenues up 23% y/y, raised full year 2011 sales guidance by $25-35m
- cash guidance for ~$1b year end, "as always, subject to any other business development activity completed by year end" [said this with heavy emphasis...makes sense in retrospect based on Adolor acquisition announced a short time later]
- Merck $MRK has now launched cubicin in japan, predict peak $100m sales there.
- 11/4 FDA will hold hearing re draft guidance for HAP/VAP (pneumonia) drug development
- pending completion of toxicology studies with an acceptable profile, by ye2011 we'll have an IND filing (phase 1 in 2012) for new discovery program- TrpA1 ion channel inhibitor candidate for pain/inflammation
q&a session-- no cubicin stocked by major wholesalers, so 3rd party data source can be inaccurate and is off by up to 60% on month to month basis. We didn't see anything to explain reporteed level of sales in the quarter except demand- no inventory build anywhere in channel
- no comment yet on cost for HAP program phase 3 trials
- 2012 expenses- will see substantial increase in R&D line.
- Worldwide '315 forecast revenue in the $400-500m range at peak with healthy margin based on very modest share assumptions. no comment on size of market overall, but "$1b" is not an unreasonable assumption for branded products
- differentiation for '315? largest unmet medical need is need to deal with relapse - even with dificid, there will be a lot of churn in this market as prescriber tries a drug with different mechanism of action after relapse
- adding Dificid to bag has improved access for cubicin
- phase 3 for '315 will not need to be run against dificid, expect comparator to be oral vancomycin
- projections calculated on launching into market with generic vancocin, but we are not predicting a date when that will happen.
- medicare/medicaid discounts reduce gross rev by 6% (accounts for half of gross to net adjustment)...projecting forward based on potential health care reform bill effect, this still doesn't go up past 10% even if all programs enacted (very unlikely).
- 4q2011 and year end conference call will be 5pm thursday 1/19/2012
- Optimer Pharma presented 9/27/11 at the JMP conference - click here for complete webcast calendar and links to my notes.
- More detailed company and pipeline info can be found on the OPTR research page.
- See my notes below-
- See below for my notes from Cubist Pharma presentation at UBS conference 9/19/11.
- Find more biotech webcasts and notes here and more info on CBST deal with Optimer Pharma $OPTR here.
- We continue to look for other assets to buy - in-license or merger & acquisition - use cash flows from Cubicin to build pipeline and company
- Cubicin and Dificid will allow us to book >$700m revenue in 2011
- Cubicin is approaching $3b cumulative sales since launch. We think annual revenue will exceed $1b before patent expiration if grow at 7% CAGR (most recent quarter was 9% growth consisting of have volume, half price impact)
- Teva agreement for generic launch 12/2017
- Cubicin: vial of drug about $200-250 per day. Generic vancomycin costs $15 per day. Why compelling to use Cubicin? Cost of drug acquisition is just one dimension of healthcare cost, look beyond pharmacy to rest of hospital system. Using cubcin in appropriate patients can save hospitals money. OSU medical center publication (CID journal) - can save around $20k per pt!
- Cubicin has bee used as once daily infusion for 30 minutes - we recently introduced 2 min push infusion from same vial. This is working out better for QOL issues in outpatient setting. But we are also hearing it is being used in the in-patient setting as well
- Cubicin now has 12% share (mostly taken from vancomycin), and we don't need very many more pointts of share to get to $1b
- we let OPTR speak about Dificid sales. They wanted to let marktet know it is going well (referring to this recent press release from Optimer).
- CB 183,315 C difficile CDAD candidate: before the end of this quarter (next 2 weeks) we will make go/nogo decision for phase 3. We own 100% WW rights, no royalties owed. We are planning to build EU commercial force to launch CXA-201, which would be in place in time for CDAD drug. We can make a very interesting return on investment with out very high revenue numbers. We will let you know in next few weeks where we are on that (the answer is yes they will push ahead into phase 3 - no timeline given, see press release)
- 13.5% of Cubicin COGS goes to LLY as royalty, other 9.5% is actually cost to make drug
- $950m cash, $560m debt, this year we will generate $170m cash, and spend $105m capex
- if 315 is a go, we will have 8 phase 3 trials ongoing in 2012/2013
- We are aggressively looking to in-license other products, that is our use for cash...first choice is a marketed product.
- q&a in breakout session
- Cubist presented at the Wedbush conference on 8/16/11 - link to webcast and other notes can be found on the Past Events page.
- CBST co-promotes the antibiotic Dificid with Optimer Pharma, see details on the OPTR research page.
- My notes from the talk are below:
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