trding - thank you, model update article will foll
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Posted On: 02/02/2019 11:29:27 PM
trding - thank you, model update article will follow up
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In the US, as shown in HIV Research Network, most patients are treated w/ HAART already and who stays on it has mostly (70%) VL suppression!
This is drastically increased in the latest years, hence the 2016 R&R metrics are much different.
Let's revisit HIV Research Network https://portalcontent.johnshopkins.edu/HIVRN/...160916.pdf
IN2015 p3 - p4 shows:
- 85% infected via sexual transmission (CCR5), of which
-- 37% infected via hetero-sexual transmission (CCR5)
-- 48% infected via homo-sexual transmission (CCR5)
- 72% have VL suppression
- 12% CD4 <= 200, very sick -> AIDS
- 94% are on HAART, of which
-- 11.4% CD4 <= 200, very sick -> AIDS
-- 25.6% CD4 <= 350, no suppression yet
CD4 count < 500 is concerning, while <= 200 are very sick and maybe diagnosed w/ AIDS
CD4 count > 500 could imply VL suppression
https://www.hiv.va.gov/patient/diagnosis/labs-CD4-count.asp or https://www.webmd.com/hiv-aids/cd4-count-what-does-it-mean#2
Now here is the thing, no VL suppression on HAART means HAART is not working,
since non suppressed VL will cause HIV-1 multiplication and outbreak.
HAART MDR-2+ proportion here not shows, but the following matches the numbers:
1.4M HIV-1 pts -> 94% HAART 1.3M pts -> 20.5% MDR-2+ 274k pts
20.5% MDR-2+ matches the HAART 25.6% CD4 <= 350, i.e. clearly w/o VL sup.
You can also think about this as follows, the HAART VL-sup population + HAART VL-failure population = HAART population.
Again, the data from HIV Research Network is one source and might not be representative to the overall US population. But good to see that the resulting proportions still match.
Maybe we together can find one current canonical source with latest data from 2015 or later we can safely use here!
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Now the model's other details ..
New version will use 'only' $70k WAC as per last slides, even though they eye even higher prices. But it is our goal to end up with the most conservative valuation possible.
Therefor our assumptions are not really bold, but modest.
You see this by us using only 46% gross margin, biotech is often much higher up to 75% as also shown in our latest slides (EBITDA margins often even up to 36.1%).
We also have included the total royalty payments of 12.50% owned to Progenics & Protein Design Labs (now AbbVie Inc.).
Let me unroll things here a little ..
Using $70k WAC -> $49k net annual revenue per patient and
HIV-1 Combotherapy in the US.
1.4M HIV patients, of which
710.8k are HAART treated (50% but increasing!), of which
248.7k show MDR2+ resistance, of which
174.14k are R5-Tropic (70% CCR5)
=============
HIV-1 Monotherapy in the US.
1.4M HIV patients, of which
995k have VLsup (70%, today ~90% in some papers), of which
696k are R5-Tropic (70% CCR5)
=============
As mentioned above, changing to the IN2015 data set, outcome is similar for HAART-MDR2+ population: Higher HAART of 94% and lower MDR2+ failure of ~18%.
You see that Combo and Monotherapy proportions are complementing,
i.e. together make the whole population 'by nature' and our sub-group
is the 70% R5-tropic HIV-1 US population.
Even if we only take 9% market penetration and the lowest PE 5 multiple and using highest dilutive OS of ~610M (O-2 SP), we end up with:
US Combo: 15.7k pts = $768M, $305M EBITDA, PE 5, 30% discount -> $1.08B MCAP or $1.77/sh
US Mono: 62.7k pts = $3B, $1.2B EBITDA, PE 5, 40% discount -> $3.7B MCAP or $6/sh
Ignoring the rest (GvHD, Cancer and ex-US) we should have a SP of $7.77/sh today, according to generally used evaluation multiples as shown in the referenced papers.
For this reason, we also have shared the spreadsheet itself for all to validate the formulas and 'play' with the numbers.
Current latest draft https://finesand.wordpress.com/2019/01/14/cyt...omment-268
Previous article https://finesand.wordpress.com/2019/01/14/cyt...ion-model/
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Quote:
Question again—Is there really 250k HAART failures with two or more drug resistances?
In the US, as shown in HIV Research Network, most patients are treated w/ HAART already and who stays on it has mostly (70%) VL suppression!
This is drastically increased in the latest years, hence the 2016 R&R metrics are much different.
Let's revisit HIV Research Network https://portalcontent.johnshopkins.edu/HIVRN/...160916.pdf
IN2015 p3 - p4 shows:
- 85% infected via sexual transmission (CCR5), of which
-- 37% infected via hetero-sexual transmission (CCR5)
-- 48% infected via homo-sexual transmission (CCR5)
- 72% have VL suppression
- 12% CD4 <= 200, very sick -> AIDS
- 94% are on HAART, of which
-- 11.4% CD4 <= 200, very sick -> AIDS
-- 25.6% CD4 <= 350, no suppression yet
CD4 count < 500 is concerning, while <= 200 are very sick and maybe diagnosed w/ AIDS
CD4 count > 500 could imply VL suppression
https://www.hiv.va.gov/patient/diagnosis/labs-CD4-count.asp or https://www.webmd.com/hiv-aids/cd4-count-what-does-it-mean#2
Now here is the thing, no VL suppression on HAART means HAART is not working,
since non suppressed VL will cause HIV-1 multiplication and outbreak.
HAART MDR-2+ proportion here not shows, but the following matches the numbers:
1.4M HIV-1 pts -> 94% HAART 1.3M pts -> 20.5% MDR-2+ 274k pts
20.5% MDR-2+ matches the HAART 25.6% CD4 <= 350, i.e. clearly w/o VL sup.
You can also think about this as follows, the HAART VL-sup population + HAART VL-failure population = HAART population.
Again, the data from HIV Research Network is one source and might not be representative to the overall US population. But good to see that the resulting proportions still match.
Maybe we together can find one current canonical source with latest data from 2015 or later we can safely use here!
+++
Now the model's other details ..
New version will use 'only' $70k WAC as per last slides, even though they eye even higher prices. But it is our goal to end up with the most conservative valuation possible.
Therefor our assumptions are not really bold, but modest.
You see this by us using only 46% gross margin, biotech is often much higher up to 75% as also shown in our latest slides (EBITDA margins often even up to 36.1%).
We also have included the total royalty payments of 12.50% owned to Progenics & Protein Design Labs (now AbbVie Inc.).
Let me unroll things here a little ..
Using $70k WAC -> $49k net annual revenue per patient and
HIV-1 Combotherapy in the US.
1.4M HIV patients, of which
710.8k are HAART treated (50% but increasing!), of which
248.7k show MDR2+ resistance, of which
174.14k are R5-Tropic (70% CCR5)
=============
HIV-1 Monotherapy in the US.
1.4M HIV patients, of which
995k have VLsup (70%, today ~90% in some papers), of which
696k are R5-Tropic (70% CCR5)
=============
As mentioned above, changing to the IN2015 data set, outcome is similar for HAART-MDR2+ population: Higher HAART of 94% and lower MDR2+ failure of ~18%.
You see that Combo and Monotherapy proportions are complementing,
i.e. together make the whole population 'by nature' and our sub-group
is the 70% R5-tropic HIV-1 US population.
Even if we only take 9% market penetration and the lowest PE 5 multiple and using highest dilutive OS of ~610M (O-2 SP), we end up with:
US Combo: 15.7k pts = $768M, $305M EBITDA, PE 5, 30% discount -> $1.08B MCAP or $1.77/sh
US Mono: 62.7k pts = $3B, $1.2B EBITDA, PE 5, 40% discount -> $3.7B MCAP or $6/sh
Ignoring the rest (GvHD, Cancer and ex-US) we should have a SP of $7.77/sh today, according to generally used evaluation multiples as shown in the referenced papers.
For this reason, we also have shared the spreadsheet itself for all to validate the formulas and 'play' with the numbers.
Current latest draft https://finesand.wordpress.com/2019/01/14/cyt...omment-268
Previous article https://finesand.wordpress.com/2019/01/14/cyt...ion-model/
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