Reply to Dooby that would not post (after 12 tries) on Yahoo
Dooby:
I'd assume a 55% dropout rate - that's off the top of my head based on trial results. Infusion reactions, non-responders, etc. As far as market size see my earlier post on Hamelin numbers vs. FDA. Going forward I'd use FDA and think SVNT would do well to capture 30K patients. Pricing? A premium to TNF Alpha is suggested. I'm not in the camp of $30K to $50K. Conservatively I say $25K. That would mean 30K x $25K = $750 million US revenues. They say EU is larger market. But IMO pricing over in EU will be weaker so I'm using $450 million EU revs. So we're at $1.2 billion. I don't buy the 3 to 7 times revenue multiplier to get a fair valuation. SVNT isn't in that strong of a negotiating position. I'm using a factor of 2. So we get $2.4 billion valuation with 68 million shares out. NOw we need to discount this back to get some NPV since peak sales are likely 5 years out (more in EU as drug won't reach patients until 2012). I come up with an estimate of $1.8 billion today. That's $26+/share. I'm backing out another $1 to $2/share due to the position SVNT is in. Now, had they pursued sales of Euflexxa a few years ago in the US they'd have an established sales force in rheumatology, and going it alone would be a more serious consideration. But that decision to not sell in the US - and pay Ferring $18 million to back out, was another blunder on the part of mgt. IMO.
I have no clue as to what kind of chaos is going on in NJ and/or with the board. Whether they're scrambling to revive any buyout interest or are considering partnering proposals (which they likely didn't solicit recently as they did 2 years ago). So partnering may be a long shot also.
If they go it alone I'd like to see Hamelin & Yachmetz pushed aside. I think they're both liabilities at this time. Use them for a transition period while a seasoned CEO, with launch experience, gets up to speed. I'm fine with a new guy getting options, a big salary and incentives to make this successful. I'm much less confident the current mgt. team can succeed. Past execution being my primary reason for being skeptical.
Wednesday, October 27, 2010
Another Blog Discovers Sparton Corp.'s Attractions
http://www.valueuncovered.com/sparton-corp-spa-turnaround-team-returns-micro-cap-manufacturer-to-profitability
Sunday, October 24, 2010
A Little Info on ALIM (Alimera Sciences)
I looked recently at a CS equity research report on ALIM published subsequent to the company getting "Priority Review" designation for its NDA (New Device Application) for Iluvien in the treatment of Diabetic Macular Edema from the FDA.
The CS report provided estimates for several important metrics including market size, pricing, percentage of patients needing treatment for both eyes, the percentage patients that can benefit from laser treatment, gross margins, and earnings.
Essentially, the report gives Iluvien a 75% probability of being approved by the FDA by around the end of this year, though no date has been set for a potential FDA meeting date on the application.
The report did not indicate the likelihood of a "panel" meeting ahead of the FDA vote. it seems likely that news about the scheduling of a panel meeting should be available soon of there is to be one.
The CS analysts anticipate approval of Iluvien and expect AALIM to turn profitable on an annual basis immediately in 2011, with e.p.s. growing rapidly to more than $5 per share by 2015.
It will be at least three years before the market will begin discounting 2015 earnings, and there still is a binary event (FDA Vote) as an upcoming hurdle.
I would recommend discounting the earnings projection back at a 25% rate for three years then applying a reasonable P/E multiple to that figure. Applying a 15x multiple to the discounted earnings of $2.50 per share generates a potential price target for ALIM of $37.50 per share. CS is maintaining, I believe, a $48 price target.
CS believes the company needs about 40 sales people to cover the market for retina specialists.
In sum, diabetes is a large and rapidly-growing market and ALIM has a unique treatment for what appears to be an unmet medical need.
Jay/AlexAlekhine
The CS report provided estimates for several important metrics including market size, pricing, percentage of patients needing treatment for both eyes, the percentage patients that can benefit from laser treatment, gross margins, and earnings.
Essentially, the report gives Iluvien a 75% probability of being approved by the FDA by around the end of this year, though no date has been set for a potential FDA meeting date on the application.
The report did not indicate the likelihood of a "panel" meeting ahead of the FDA vote. it seems likely that news about the scheduling of a panel meeting should be available soon of there is to be one.
The CS analysts anticipate approval of Iluvien and expect AALIM to turn profitable on an annual basis immediately in 2011, with e.p.s. growing rapidly to more than $5 per share by 2015.
It will be at least three years before the market will begin discounting 2015 earnings, and there still is a binary event (FDA Vote) as an upcoming hurdle.
I would recommend discounting the earnings projection back at a 25% rate for three years then applying a reasonable P/E multiple to that figure. Applying a 15x multiple to the discounted earnings of $2.50 per share generates a potential price target for ALIM of $37.50 per share. CS is maintaining, I believe, a $48 price target.
CS believes the company needs about 40 sales people to cover the market for retina specialists.
In sum, diabetes is a large and rapidly-growing market and ALIM has a unique treatment for what appears to be an unmet medical need.
Jay/AlexAlekhine
Saturday, October 16, 2010
Preliminary Idea: Alimera Sciences (ALIM)
Alimera Sciences (ALIM) is a development-stage company that has completed a Phase 3 study of Iluvien, its investigational device for the treatment of DME (Diabetic Macular Edema). Currently, patients with DME have an "unmet medical need."
Here is a link to the slide deck from a recent conference presentation:
http://files.shareholder.com/downloads/ABEA-4IAIIR/1039523696x0x402653/b9516ee7-fc7f-423c-8ef8-7d379993baa7/ALIM%20Presentation%2009.2010.pdf
DME is a swelling of the macular region of the retina which results in a loss of eyesight. The company's product is inserted into the back of the eye where it releases a constant low-dose stream of a steroid. In the P3 trial, the device was shown to result in a measurable restoration of vision within 3 weeks. Patients continued to experience vision improvement for the next 24 months.
ALIM will be presenting data from its P3 trial of Iluvien at the American Academy of Opthamology today, October 16th.
On August 30, 2010 ALIM received "Priority Review" for Iluvien. With the NDA for Iluvien having been filed June 29, 2010 the company now expects action on its NDA by the end of the current year.
Another interesting way to play the potential approval of Iluvien may be through PSDV, pSivida. PSDV will earn a 20% split of operating profits from the sale of Iluvien, and also will receive a $25 million "milestone payment" from ALIM upon FDA approval of Iluvien.
The equity market cap of PSDV currently is about $100 million and the company recently had balance sheet cash of $17.5 million not counting the milestone payment.
The equity market cap of ALIM is around $300 million. ALIM last week obtained a $32.5 million credit line, presumably in order to make the $25 million milestone payment to PSDV.
Currently, I do not know much about the intended pricing for Iluvien. However, the market opportunity appears to be large and growing rapidly, as it is related to the number of cases of diabetes.
I am hoping some of you Savientors can help on this idea.
Here is a link to the slide deck from a recent conference presentation:
http://files.shareholder.com/downloads/ABEA-4IAIIR/1039523696x0x402653/b9516ee7-fc7f-423c-8ef8-7d379993baa7/ALIM%20Presentation%2009.2010.pdf
DME is a swelling of the macular region of the retina which results in a loss of eyesight. The company's product is inserted into the back of the eye where it releases a constant low-dose stream of a steroid. In the P3 trial, the device was shown to result in a measurable restoration of vision within 3 weeks. Patients continued to experience vision improvement for the next 24 months.
ALIM will be presenting data from its P3 trial of Iluvien at the American Academy of Opthamology today, October 16th.
On August 30, 2010 ALIM received "Priority Review" for Iluvien. With the NDA for Iluvien having been filed June 29, 2010 the company now expects action on its NDA by the end of the current year.
Another interesting way to play the potential approval of Iluvien may be through PSDV, pSivida. PSDV will earn a 20% split of operating profits from the sale of Iluvien, and also will receive a $25 million "milestone payment" from ALIM upon FDA approval of Iluvien.
The equity market cap of PSDV currently is about $100 million and the company recently had balance sheet cash of $17.5 million not counting the milestone payment.
The equity market cap of ALIM is around $300 million. ALIM last week obtained a $32.5 million credit line, presumably in order to make the $25 million milestone payment to PSDV.
Currently, I do not know much about the intended pricing for Iluvien. However, the market opportunity appears to be large and growing rapidly, as it is related to the number of cases of diabetes.
I am hoping some of you Savientors can help on this idea.
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