While the inventory adjustments are not surprising, given the generic deflation and rebidding event from mid-2017 as well as the Doryx generic event, it still adds to the negative sentiment impacting the share price currently.
Although, MYX continues to experience short-term headwinds, the pipeline does offer potential growth opportunities. Post recent product launches, the pipeline now stands at 35 products targeting sales of c.US$5bn, with 17 products pending approval at the FDA. In FY18, MYX expects to receive approval for six products that target sales of c.US$500m, including a first-to-market opportunity. It is difficult to predict what impact this may have in 2H18, but if MYX achieves a c.30% share at the generic sales level on an annual basis (c.US$65m) and allowing for the time to product launches, MYX could achieve sales of c.US$10m to c.US$15m in 2H18.
In addition, a generic to Clozaril has been launched (Clozapine) and a generic to Monodox is expected to be launched in the new year. I
n the branded portion of the pipeline, the big hope for MYX relies upon SUBA Itraconazole (SUBA), initially as an anti-fungal treatment and potentially as a treatment for certain cancers (BCCNS).
The anti-fungal treatment is currently sold in Australia, Spain and Germany with another seven market launches over the coming year. The patented formula treatment is continuing to have encouraging results from studies. In the US the anti-fungal triazole market has a sales value of c.US$520m pa. The addressable market for serious systemic infections is c.US$200m pa in which SUBA is expected to dominate.
The anti-BCCNS treatment is further down the track but encouraging results suggest a preNDA meeting with the FDA may occur in 2018. The unmet demand for the specific area of Gorlin syndrome is estimated at c.US$300m pa, excluding the wider off-label application within the BCCNS family of cancers.
Despite the current headwinds facing MYX in the US Generics market, the medium-to-longer term view of the pipeline and re-weighting away from US Generics, and the relative discount in the share price informs our decision to remain at BUY
MYX Price at posting:
60.3¢ Sentiment: Hold Disclosure: Held
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