engima2 schreef op 4 november 2014 13:32:
PHARM: Ruconest Launches in U.S.; A Cool
$20 Million Coming to Pharming
Ruconest has launched in the U.S. and Pharming should soon receive its $20 million milestone payment from Salix (SLXP-Buy). We believe Ruconest represents a "clear and present danger" to Shire's (SHPG-NC) Cinryze on the prophylaxis front and doctors now can openly discuss the potential and differentiating safety benefits of recombinant Ruconest over all the available plasma based products. Reiterate Buy.
Event
Pharming and Salix announced the launch of Ruconest in the U.S. to treat acute HAE (excluding patients with laryngeal attacks). Importantly, Pharming is now going to receive a $20 million milestone payment upon the first sale.
Impact
The U.S. launch represents an historic event for Pharming and we believe the launch will be strong. We base our assumption on certain key factors. Of utmost important, in our belief, is the ability of physicians to now talk freely about the potential safety benefits of this recombinant product. Previously, docs have been unable to talk about Ruconest as the only recombinant product (very high purity) available for HAE and had to focus on the plasma based products. To this end, Ruconest benefits from a benign safety profile, with no thromboembolic events seen to date, compared to plasma derived Cinryze and Berinert with an incidence of ~3.4% rate of thrombosis events. This may be attributable to the plasma derived Cinryze and Berinert with ~20-25% impurities in their formulations. We also believe that Ruconest will compete on pricing based on its attractive COGS. We see the economics of the Salix partnership as quite favorable to Pharming. For the first $100 million in sales, Pharming is entitled to 30-40% of net sales based on a combination of both royalties and drug supply to Salix. We also look forward to the ongoing Phase II HAE prophylaxis study. We believe this represents a "clear and present danger" to Shire's Cinryze and that Ruconest could compete on cost and more importantly on potential safety differentiation. Cinryze and other plasma based products have clear warnings on their labels, specifically the risk for thromboembolic events as well as infectious disease risk.
Action
We reiterate our Buy rating and our target of $3. The company's strategy to expand geographies through collaborations and to develop therapies for rare diseases will bear fruit over the long term, in our opinion. Given the pricing power of orphan drugs and the expanding markets in these indications due to better diagnoses, we believe that Pharming is well-positioned for commercial success.