For newcomers. On valuing Lympro:
Eli Lilly should be considered a potential candidate for Lympro partnership or eventual acquisition.
Quote:[emphasis mine:] Amyvid costs roughly $1,600 per dose. Patients then undergo brain imaging through positron emission tomography (PET) scan, which is an additional cost of another roughly $2,000 per incidence. Besides being rather expensive, Amyvid is ineffective if the patient is not experiencing memory impairment due to the buildup of amyloid in the brain. This suggests that early diagnosis in high-risk patients is unlikely. Instead, we see Amyvid as a useful tool in tracking amyloid levels in the brain of suspected Alzheimer's patients over time. We see utility in this application, but at roughly $3,600 per test, this seems a highly inefficient mechanism.
Nevertheless, Lilly believes that Amyvid is an estimated $750 million peak market opportunity. We believe this may be aggressive. We note that Eli Lilly acquired the Amyvid test by acquiring Avid Radiopharmaceuticals in 2010 for $300 million upfront and $500 million in backend consideration. The total deal price of $800 million is 25X the current market value for all of Amarantus BioScience Holdings, Inc., which includes the Amarantus Therapeutics division currently developing a mesencephalic astrocyte-derived neurotrophic factor (MANF) for the treatment of Parkinson's disease and other ischemic disorders.
In April 2013, Lilly reinforced its commitment to Alzheimer's diagnostics by acquiring a novel Tau tangle diagnostic program from Siemens Medical Solutions USA. The program includes two investigational PET tracers intended to image Tau (or neurofibrillary) tangles in the brain. Like the company's amyloid targeting program with Amyvid, Lilly believes that the amount and location of Tau tangles in an Alzheimer's disease patient's brain correlates with the severity of the disease. However, similar to amyloid, there is no definitive proof that Tau tangles mean a patient has Alzheimer's, and by using PET, Lilly is further entrenching itself on an expensive and inefficient platform.
Amarantus’ LymPro Could Be A Game-Changer For Alzheimer’s Diagnosis, Jason Napodano, April 17, 2013
Eli Lilly should be considered a potential candidate for Lympro partnership or eventual acquisition.
Quote:Following clearance under CLIA, Amarantus will focus on gaining U.S. FDA approval for multi-lab use. Once enough clinical utility data has been generated, Amarantus can approach the Center for Medicare and Medicaid Services (CMS) and gain reimbursement for broad-scale use. This is an important step, especially in light of the fact that CMS has denied reimbursement for Eli Lilly’s Amyvid given a lack of clinical and pharmaco-economic evidence. Amarantus believes it has identified CPT codes relating to cell cycle dysfunction and Alzheimer’s disease that might facilitate reimbursement for LymPro under CLIA or commercial sale. Ultimately, if the data look good, Amarantus might petition to have LymPro included in the diagnostic guidelines for the “Age 65” test. This would be an enormous advantage for the company, and something worth looking deeper into by management. We remind investors that Lilly is charging roughly $3,000 per test of Amyvid. Amarantus CEO, Gerald Commissiong, believes Amarantus can charge “significantly less” but still capture strong gross margin (we estimate ~90%).
Outlook On Amarantus Remains Positive, Jason Napodano, May 22, 2014
