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Vernalis Share Discussion Threads
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|Think this stock has some way to fall in short term but is also good value for the long term. There are several opportunities for good news in the next 6 months with milestones being reached and final accounts.
For those asking the same question I was about sales growth disproportionate to revenue growth of Tuzistra XR. My thoughts from research:
There are 2 issues at play:
1)You can take the view the disproportionate growth is because Vernalis are giving it away. My thinking is management realised original price was uber-inflated and corrected by pricing at market value. Quick, crude math with Tuzistra Interim sales figures:
- £600k for 1976 prescriptions of cough medicine means VER expect revenue from a single prescription to generate a cool £300 - yes for cough meds, hi-tech cough med yes, but nonetheless.
- The recent interim result of £800k for 11,586 prescriptions would generate £70 per prescription. This is evidenced in two major price reductions since launch to help sales team shift volume
- The sales growth is not simply price driven, there has been an improvement in the sales setup with the operation having been rebooted. The previously bloated and under-performing sales team has been shredded to a leaner size with more experienced individuals. Also important to note, lessons learnt from this launch should benefit future product launches in the US.
- There are more factors (only half way through flu season being an obvious one), but with common sense and basic math one can surmise VER misdiagnosed the supply demand curve.
2)FDA approved Tuzistra XR and, a few months later approved competitor product Tuxarin ER (US version of keeping the game fair?). Ofcourse this placed downward pressure on Tuzistra sales and contributed to retail price discount. Both products are licensed for 18 years old and more. Interestingly, the FDA recently began disciplinary proceedings against Tuxarin manufacturer for failing to disclose this age requirement on its packaging/sales material. The manufacturer will likely be required to repackage all brand materials according to its license and pay a form of a fine.
This should be good news for VER which will probably be evidenced in full year report. Penalising a dishonest competitor should return significant market share which it deserves ... so long as, without a competitor, it doesn't fall into the greed trap and charge your average American $400 for cough medicine again.|
|I haven't watched the investor webcast yet, has anyone heard any certain explanation as to how prescriptions can rise 600% and yet revenue barely rise at all. Other than sales people giving the stuff away for free...|
|...and today was certainly a 'thin' day! could do with less of those; although good news could no doubt be transformational these biotechs all seem to be taking ages to deliver :-(|
|No net growth in value since mid 2014 and the 'new' strategy announced.The full season report on Tuzistra's performance must be seen as a key test of the board's turnaround to move into a tough US business sector, such as the prescription cough and cold market. Everything to play for but we don't want to be seen as yet another pipe dream play in the long British Biotech saga.Dr Fellner please note! We have stuck with you through thick and thin!|
|BTG has suffered a similar experience launching novel products into the US health sector.Learning the behaviour of the insurers and the incentives needed to gain acceptance by health professionals is a timely and costly exercise!The gradual reduction in codeine formulations over time is a further complication.Still at least the lessons being learned with Tuzistra can be helpful with the next two products and the final pair in 2018/9.A speedy agreement with the new owners of Suir is a must because FDA approval of the new production might be a formality, but it still has to be gone through.|
|It does suggest a lot of sales may have been through the affordable access route with revenue therefore delayed and/or reduced.|
|prescriptions increase six fold yet revenue generated goes from £600K to just £800K. Are they giving them away?|
|Referring back to the influenza spread map of the US for this season, the spread kicked in around Christmas and doesn't looked like it has peaked yet, March is often the worst month. This fairly supports an expectation that prescriptions will be back loaded in the season with, if consistent with the prior year, perhaps 84% of full year prescriptions occurring in Jan/Feb/Mar.
This if course highlights the importance of the 2017 launch of Moxatag and sorting out supply issues to reduce the seasonal nature of the revenue stream from Tuzistra XR. Progress on Moxatag is not referred to in the release, hopefully more information released on that very soon.|
|It is important to note that four of those months were pre-season.
Last year 16% of sales occurred in the first period and 84% in the second. If that same pattern continued then the FY prescriptions would be 60k-70k, which is a decent improvement on 12k in the full launch year, if not quite the performance I was hoping to see.
Not quite sure about the share price reaction, it is down just 5p at the moment, not terrible and the trades seem to be a mixed picture that includes a number of large buys. The current level seems to have reasonable support.|
|11586 prescriptions in six months seems pretty insignificant to me given the size of the market, share price reaction tells the story imv.
may see it drop further yet aimho
|Quite a mix of buys and sells this morning, seems the market is unsure what to make of these results. I was hoping to see a clear indication of progress on sales but I guess we need to see results for the second half of the season to get a better idea on how well they are doing with Tuzistra XR. The prescriptions increase is encouraging but 2K per month seems well below what should be possible at this stage given that the US has had a very severe flu season this year.|
|Vouchers to be given to the pharmacy in return for a significant discount.|
|A 600% increase sounds a lot but the significance would depend on where you start from, the outlay required to get these increases, and the price that Vernalis are getting for these prescriptions. Does anybody know what the "patient assistance program is" because that has increased ?|
|Cantor Fitzgerald on Tuesday retained Vernalis PLC’s analyst rating as ‘Buy’ with its price target of 101 highlighting a potential increase of 208.4% from Vernalis PLC’s current price of 32.75.|
|A 600% increase in prescriptions is hardly to be sniffed at.|
|A 'keep the faith' statement. It will need steady nerves to hold for the next 12/24 months.|
|also from the interims...
"The Company announced in February 2017 that Corvus Pharmaceuticals Inc had reached the predefined criteria for expansion of the cohort of patients with renal cell carcinoma treated with single-agent CPI-444 in the ongoing Phase 1/1b study. The expansion of this study triggered a $3 million milestone payment to Vernalis under the licensing deal with Corvus. Promising evidence of single-agent activity has also been seen in patients in other disease-specific cohorts, including lung cancer and melanoma
Ian Garland, Chief Executive Officer, commented,
"We are encouraged with the progress we have made in the last six months as we continued to expand our sales and saw further progress in our cough cold development pipeline.
"Midway through the 2016/17 cough cold season we have seen Tuzistra(R) XR prescriptions continue to grow steadily. We believe the emergence of high performing sales representatives in all regions across the US validates the market potential for Tuzistra(R) XR. We are, however, still in the early stages of the launch and our focus for the second half of the season is to drive sales-force effectiveness and so further increase the proportion of high performing sales territories. With continued prescription growth expected, the annualised run-rate at the end of June 2017 should provide a more meaningful predictor of sales performance for future years.
"We expect to achieve a number of milestones from the remainder of the cough cold franchise in 2017, including potential approvals by FDA of CCP-07 and CCP-08. We also continue to seek other opportunities to leverage our US commercial infrastructure and remain very excited about the growth potential of the business."
Presentation & Conference Call
Vernalis management will host a presentation at 9.30am (UK) today at the offices of FTI Consulting 200 Aldersgate, Aldersgate Street, London, EC1A 4HD. It will also be available via webcast at hxxp://www.vernalis.com/investor-centre/presentations-and-webcasts and www.cantos.com and via conference call, which can be joined by dialling: +44 (0) 20 3003 2666, Passcode 5780976# Please contact Jack Bower at FTI consulting +44 (0) 20 3727 1000 for details.
|Good results tomorrow ought to trigger a decent recovery in the share price here.
I think we are looking for some evidence that that Tuzistra XR will at the very least comfortably replace revenue that would previously have come from sales of Frovatriptan.
Yes, for the current year the recently announced milestone payment already more than achieves this, but Tuzistra XR will be a reliable, regular source of income that keeps growing over the long term.
I'm looking forward to any further information about the H2 launches that will fully utilise the sales team into which so much investment went last year.
Good luck all!|
|thanks for the reminder fhmktg - the Vernalis website could do with an update as I can't find key anticipated results dates anywhere there - if I could I'd a link to the header - the only reference to tomorrow's news seems to be in the RNS of 30-Jan:
"Vernalis plc (LSE: VER) announces that its unaudited interim results for the six months ended 31 December 2016 will be released on Tuesday, 21 February 2017."|
|Tomorrow's numbers will only include the very early figures for Tuzistra this cold season, it will be the coverage of insurers, stock deliveries and the scrip build up numbers that will get my attention.Contracts with CVS and Walgreens and confirmation of an agreement for Moxatag would be a bonus.Fingers crossed for tomorrow.|
|Buyers coming in ahead of the numbers next week?|
|woody, what an excellent post, thank you.|