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My model for AndexXa revenueHello Board, Thanks again for the help in ascertaining various numbers like #hospitalized, ICH, death rates, etc. In response, I'd like to share my model as some have requested. Let me first state some assumptions. I am using a composite of analyst estimates for general numbers like the #NOAC patients, etc. I'd like to note that my model tracks closely with analyst numbers during the middle years of AndexXa launch. It differs materially during the first 2-3 years(19-21), and again in the outer years (24-26+). I'd like to note the reasons for this before proceeding. First, it turns out the analysts are not disputing the top-line numbers like the number of hospitalized for major bleeding after all. They have used terminology that's confusing, but they're being quite conservative with 'addressable market' for Andexxa and 'market penetration rates.' Their reasons are vague such as "physicians will prefer to let the Anticoagulant wear off on it's own, and in some cases it will not be clear when last X&E were taken." I actually agree that in absolute majority of cases, the physicians will try to let X&E wear off on it's own. But, there will be cases where the patients are facing 50%+ odds of dying if you don't do anything. In such cases, the physicians don't have the luxury of waiting and doing nothing. In ICH setting, Andexxa has shown to lower the mortality rate to 12% versus ~50%. Basically, you go from a coin flip to 90% survival. What would you do? So, the key is identifying the number of patients in such situations. ICH is easiest to define. So, what is the corresponding number for non-ICH setting? The company (Lis) has stated that they are targeting ICH (15% of hospitalized) plus non-ICH at great risk of dying (20% of the rest) to come up with 35% of the hospitalized as their target market. In the Q2 CC, they stated that they're seeing about half ICH, and half non-ICH which tracks with their expectation. So, I am assuming that the target market is double ICH setting defined as patients facing greater than 50% chance of dying overall. I am assuming that the doctors can identify when patients are moving into 'danger of death' zone and cannot wait for AC to wear off, as they monitor the patients in the hospital. I believe this is a safe assumption for most cases. With all that said, here are top-line numbers from my model going from 2019 to 2021 where they differ from analyst models. Number on NOAC: 4.2M, 4.8M, 5.8M (taken from analysts). Hospitalized (140K, 160K, 190K), ICH (21K, 24K, 29K), non-ICH at 2/3 risk of death (21K, 24K, 29K) leading to Andexxa addressable market at 42,000, 48,000, 58,000. I assume market penetration rate of 25%, 33%, 35% for the first three years. High dose A costs 49,500, low dose costs 27,500, I am taking Citi's pricing model, net to PTLA at $25K, $26K, $27K. All this yields revenue of 268M, 416M, 549M for the first three years. In comparison, Citi model has 133M, 244M, 457M. As you can see, the numbers start to converge already. If this model tracks, the stock price for PTLA will hit 80+ in 2 years time, because the market will give 10x+ sales at this point. Consider that Europe and Bevyxxa will contribute some revenue to PTLA as well for likely 500M+ revenue in 2020. So, I am adding to my position, but my biotech investing professional friend keeps advising me that this is a 2019 story, and Nov/Dec is when the stock price will firm up. On the other hand, you never know when the stock will appreciate/deprecitiate. In my next post, I will state my reasons for higher uptake in the first three years. |
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Msg # | Subject | Author | Recs | Date Posted |
4900 | Re: My model for AndexXa revenue | seanleecfa | 10 | 8/15/2018 8:08:22 PM |