Analysts are not impressed . They should be | PTLA Message Board Posts

Portola Pharmaceuticals, Inc.

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Msg  6578 of 6927  at  11/8/2019 11:12:07 AM  by

theriver


Analysts are not impressed . They should be

Goldman Sachs came out with neutral rating on PTLA with PT of 35. Same as CS. Oppenheimer maintained overweight, but cut the PT to 40 from 42. They are starting to agree and align.

Consensus revenue for 2020 is 230m. I don't understand this, because I think 4Q consensus will creep up towards 45m with actual being 47-48m like MarkD is predicting. 230m for 2020 will represent very little growth for 2020. This will have to be revised upward some time in the next 6 months.

Here is PTLA investment thesis. There were 150k hospitalized with serious bleeding in 2018-2019 with 25k deaths. Wave 1 countries in EU have similar numbers. So, total of 300k hospitalized with 50k deaths. If Andexxa achieved 15% market penetration and got used on 50k patients, that's a billion dollars in revenue. I believe it's reasonable to expect that a life saving drug will be tried on people who are dying. By 2025, the numbers will go to 700k hospitalized with 100k deaths because FXa inhibitors are eating into Warfarin usage as well as ageing of the population. So, 2B revenue by 2025 is very much possible. Emergency surgery and Cerdulatinib is extra.

Let's look at it another way. They will do close to 50m in 4Q. That's already 200m in annualized revenue. That will be done with ~650 hospitals in U.S. with a small contribution from EU. PTLA is trying to get into 2,100 hospitals. This is a very rough estimate, but it's reasonable to multiply the annualized revenue by a factor of 3 or 4. I am roughly offsetting deeper usage over time with smaller hospitals coming on later. In other words, it's reasonable to expect 600m in U.S. revenue. Kick in EU at half of US with 300m, and we can get to 900m. Since FXa usage is expected to double and the target market is expected to go from 300k to 700k, we can easily get to 2B from this line of analysis. Again, emergency surgery and Cerdulatinib is extra.

I think the analysts will have to continually upgrade their estimates over the next 2-3 years. Of course, there will be variability from Q to Q, but we're really in good shape.

The only risk remaining is Annexxa-4 study coming up blank in a couple years. I would find that very, very surprising. Less than 5% chance of happening. Andexxa is really good at reversing FXa inhibitors. It has to have an impact. Real life usage is bearing that out. I'd be interested in finding out what the KOLs say about it on the investment day, what they're seeing in the real world. But, I bet they'll be singing the praises of Andexxa.

Oh, the other risk is political. But, if Andexxa's cost gets hammered down, I bet it'll get used a LOT more. So, the overall revenue impact is probably minimal. Plus, hospital based drugs are not the target these days....



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Replies
Msg # Subject Author Recs Date Posted
6579 Re: Analysts are not impressed . They should be erniewerner 6 11/8/2019 12:03:52 PM
6582 Re: Analysts are not impressed . They should be biobeware 3 11/9/2019 10:48:12 AM






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