hen I was young I used to love those Looney Tunes cartoons....very entertaining...Tonight I will look at a comparison to us, one that we have explored before, one that isn't quite as Looney as the original Looney Tunes gang but one that I hope you will find of benefit and perhaps entertaining along the way...Don't worry, it won't just be a re-hash tonight, I'm adding some new material to this story which we will cover too.
Old school cartoon entertainment, but entertaining?...Sounds a little like our drug, its an old molecule repurposed for our benefit...and hopefully soon for the world's benefit?
To help pass the time as we patiently wait for the next major stage, comparisons to others can be insightful and helps us forecast what one day we may look like.There is a fair bit of quiet and even perhaps some nerves as we wait for the next round in the ongoing IND application.
Longer term holders still need to be wary of where we are going and what the future might hold for us.Its time like this it is often better not to watch too closely for fear of acting too soon?Tonight we take a relook at the story of Humira and an update on how they are going, how it relates to us and how it can help get a sense of just what we have.
As usual, do enjoy.
WHAT IS HUMIRA, WHAT DO THEY TREAT?
Humira treats Rheumatoid Arthritis (RA). How is that different to Osteoarthritis (OA) (new guys, thats our primary indication)...Simply think of OA as a wear and tear type condition though we know it is more encompassing than that and in fact it impacts the entire joint. RA on the other hand is more of an autoimmune condition, the body attacking itself. Why would the body do this? Well sometimes something is not quite right and it can't turn it's defence mechanisms off. Think of it like a jet engine that can't shut down for instance...you will always be in a state of inflammation. There are many such conditions that present themselves like this, some include 0:
Type 1 Diabetes
Psoriasis
Multiple Sclerosis
Coeliac disease
Lupus
Humira has since expanded their indications from the original RA indication. In much the same way we too will slowly expand out our profile and capabilities over time. It will be this future multiple revenue stream that will only add to our ARG...Aggressive Revenue Growth. Mozz Translation? Increasing sales, growth on growth....I love it, you love it and the market one day also will love it. (Don't worry about the market for now, they are lagging behind reality, let's call it a looney share price).
WHY LOOK AT HUMIRA?
Ah there are many reasons to look at this drug in a comparative sense. RA is just one of them. Other reasons include the fact that we can easily track sales of Humira from zero to hero...We'll come back to their sales a little later in this post. Let's take a closer look at their offering and contrast it to ours:
EFFICACY
Well it finally all boils down to how your drug works and how does it stack up against the competition thats currently out there.
Some questions I'd be asking is:
Does their drug work? Does our drug work? How do they stack up alongside each other?
There are a few measures to look at, first clinically. Now of course we are yet to broach our P3...but we can at least compare our P2 alongside.
Hmm very similar result indeed from what I can ascertain. We achieved almost 50% reduction, but so did they...however some important points:
1) Our results were not measured at our peak, this has now been adjusted in the P3, Day 53 as opposed to Day 81. 2) Our course lasts just 6 weeks and then it stops....theirs is continuous. 3) I have used an average of about a drop to '8' in theirs as the pain scores start to climb again after the initial big drop, see red arrow in the chart below.
(Note ADA group is Humira)
(Left single click if image above is small)
Next area in this subsection has to be PGIC.
Before we tackle it, a little background on Humira, their drug was tested in combination with a current std of care known as Methotrexate.
63% of patients with RA that took Humira reported some improvement (greater or equal to a 'moderate' improvement).
Now you need to understand again that RA is different to OA, I am just using them here as a basic comparison in terms of effectiveness.
In terms of iPPS? An impressive 76% of patients reported they got some (or greater) improvement.
Let's view this as a side by side graphic, iPPS on the left.
MARKET SIZE
No point in comparing us to anything if our market size is small and we have a tiny runway. What the point of owning an A380 if you just have one kilometre of tarmac?
Big Plane = Big runway is a requirement Big Dreams = Big Market is a requirement
RA is just 1/10 the size of OA....this sets us up nicely.
Paradigmers, a reminder here for us, the pain market is even bigger.
DURABILITY?
An important area, what's the point if a drug's durability lasts only for a short time. Yes the longer the better here. Humira's dosing is generally once every 14 days and it's usually prescribed for years. Now durational studies are part of our upcoming studies so we will get a better sense of this later on, but it's looking like the average patient may get a good 9 to 12 months, perhaps longer out of it. This bodes very well for us. A short 6 weeks course and then you don't have to think about it for almost a whole year? It's going to be great to have this on our side when it comes time to negotiate with those payers. (Just my views).
DMARD -v- DMOAD
Humira is classified as a DMARD, this makes it more relevant to compare with us. Some even better news here is that Humira isn't the only DMARD. How does that help us? Well that means they have competition, but despite that they did some phenomenal sales, yes we will get to the sales comparative soon. If we are proven to be a DMOAD there is one big bonus for us...Paradigmers, there is NO OTHER DMOAD out there, we have no competition....I also cannot see any meaningful competition out there yet and we will have at least a number of years head start...the sooner we are out there the better, once we become first in class and first in line we go to the top of the Doc's remedy toolkit. That's where you want to be, top of mind and top in class.
Top of class? That's what we want.
MULTI ACTIONARY
Now we are just talking bonuses here. Yes for a good drug it needs to work, it needs to address pain...it needs to tackle the underlying condition but our future shareholders are going to want MORE......they don't just want ONE indication, even if it is a big one like OA...they want MULTI facets. That's where the future growth is and as they say, the market is always forward looking (though it is completely blind right now - my views).
HUMIRA tackles:
Crohn's disease
ulcerative colitis, an inflammatory condition of the intestines
ankylosing spondylitis, a rheumatic disease causing pain and stiffness in backbone
psoriasis associated with arthritis
polyarticular juvenile idiopathic arthritis
rheumatoid arthritis
moderate to severe plaque psoriasis
non-radiographic axial spondyloarthritis
hidradenitis suppurativa
non-infectious uveitis affecting the posterior segment of eye
sarcoidosis
chronic non-infectious anterior uveitis
oligoarticular juvenile idiopathic arthritis
IPPS is already looking at:
OA
CHIK-V
RRV
MPS
HEART FAILURE
ARDS
It's not just about a drug working and providing benefit, though that's a fair chunk of it. The other side is the multiple indications it could treat.For example, a drug that can address one knee at a time, safely, and efficaciously is good. The same drug AT THE SAME TIME that can address MULTIPLE joints is much better.Now add to the mix that other indications may possibly be addressed then all of a sudden we find ourselves in another league. Now I'm not sure if there will be some tweaks to our drug, some additives to address other indications such as Heart Failure or ARDS in the future, the dosing regime might be different for example and it could be possible that it is more efficient to deliver the same base iPPS with the slight tweaks as a different branded durg, or even something like Zilosul-Beat (for Heart)... Maybe Zilosul-Clear (for Hay fever or Breathing difficulties)..and how about Zilosul-Patch for those inflammatory wounds that just won't heal on their own?
Mozz in marketing? Nah think I must stick to my day job! My point here is that the sales reps eventually may have to make less calls to Docs, cover more regions with a single call and have an excellent suite of products all from the one PARagon of a company.
When will we see this on the shelves?
But the big bonus for you and I, more than any of those Wacky Mozz Marketing suggestions is.......PAIN.... Pain is so big...you do that safely and you get a big gold star. The safe, consistent addressing of pain without too many repercussions like addictiveness or side effects....well the word 'lucrative' kinda doesn't do it justice.
This is what I want, a gold star for awesome work...for great future potential.
MOA
It's fun to talk about the merits of our drug particularly when there are multiples ways our drug works.
To tell you candidly, if there is anything in this entire Mozz post that you pick up, it should be the next 7 bullet points just below.
I have done a fair amount of research, not all from just one angle and not just in the last 2 weeks...I have researched and covered a number of areas....I have never come across a drug that can tackle the disease of OA like ours can. Put it simply, OA is in fact the final frontier as far as major diseases are concerned. I was going to say there maybe a drug out there that combats and tackles a certain aspect of OA...but you know what, I don't think even that is true...it might address something like pain indirectly, but it has side effects...there is nothing that has promised to give functionality back and to do it safely and as consistently as us.
Read the below, if this is all that you take away from this post, my job here is done. After that, it is up to you....invest, don't invest...investigate for yourself, spread the word or keep it to yourself....all decisions for you, the reader. I know what I am coming across, I know it is not just theory...I have talked to patients in the past, I am talking to patients right now....I forecast where this is going. Not at all advice.
How does our drug work, what are the distinct pathways:
Mild thinning ability, assists with getting those nutrients to the right spot, healing properties.
Downregulation (not blocking) of TGF (think of this as pain secretion by cells under duress)
Amazing binding action with certain proteins that assists in repair and assists in decreasing subsequent damage.
Through downregulation of certain enzymes, degradation of cartilage is retarded
Promotion and stimulation of certain proteins to act in the chondroprotective scaffolding such as cellular matrix
Ok what about for Humira, what is their MOA? Well they just block out TNF-A...done. Ramifications of this? We'll cover that in the next section.
SAFETY
Yes we get the merits, but I ask you, would you take a risk if there were safety issues? Depends on the risk and the probabilities right?
We have NO serious adversities to date. In all of the animal experiments, in all of the hundreds of millions of injections (yes thats right, think vet industry) there have been how many fatalities?
Nota one Zilcho Nufin' Not a one Null
What about for Humira?
Well result are a bit mixed. In theory their product works by blocking TNF, we know that immunosuppressants generally can lead to an increase in the risk of infections and there is a particularly heightened chance of this on initiation of such medicines.8 There have been studies in this area that allude to a twice the increased chance of such infections but also other studies that find this factor to be inconclusive.
What are the results of Humira then? Well some 55% of patients report good effects and some 31% reported negative effects. 9
In terms of adverse effects, well it's here where after many years they have found that there are some serious adverse effects:
Despite more serious side effects being uncommon, it has been linked to nervous system problems, blood cell problems, heart failure, liver problems and even cancer. So much so that the FDA have made them carry a black label warning about the increased risk of cancer over time using this product.
Relevance to us? Well we know we aren't a total blocker, we don't have a negative effect on one's immune system and yet we can clearly see despite the negatives the huge sales Humira have achieved, let's take a closer look.
A SALES COMPARISON
Humira started off with their first indication approved and their sales starting on the very first day of 2003. What then did Humira achieve in just ONE year?
Surely a Mozz Quiz® and again thanks for the outpouring and demands for these such quizzes, much appreciated and I who am I to hold back on such requests?
Question - WHAT DID HUMIRA ACHIEVE AFTER ONE FULL YEAR OF SALES?
Well it has to be something of note? $17 million dollars of revenue
$50 Million?
I'm getting closer aren't I? $97 Million revenue?
Surely its not north of $100,000,000 ?? (That's $100 million USD)
In truth you could add up all of the above and still be shy of it!...
I give you $280 million!
Would you believe they expanded sales to 22 countries all within just the first year? Now thats what I call ramping.
Remember RA is just one tenth the size of OA in terms of market size. Paradigmers, they hit more than ONE BILLION dollars in just the first two years of sales, Mate, that is a lot any way you dice it.
What did they do at peak sales?
Look, I'm a fairly conservative fellow, yes I'm enthusiastic about our potential future, yes I do rely on a few here to keep me tempered, to keep me anchored, to make me aware that there are still some risks....when I use pentrational calculations I settle at about 10%...If I'm feeling really good about things I might sneak it up to 15%....
What then did a drug like Humira achieve at their peak?
Their peak sales were a faint worthy 65% penetration of the RA market...that's insane...I wouldn't even dare use anything above 50% ever...it's just too silly and the figures only just fit on my calculator and thats the upgraded one that handles more than 10 digits?!
Yep, thats me above if I let the figures get to my head and I use anything approaching even remotely close to market 50% penetration!!
At peak Humira hit a massive $20 Billion in annual revenue and then it was feared it would all reverse? WHY? Because of looming competition in the form of biosimilars. Let's investigate.
THE NEW STUFF
Well here is the update. Humira we knew would be in the decline from about last year onwards....why? Well don't forget its been out there for a number of years (since 2003)...It has warnings...Black Labelled as we know....there are real dangers in some cases with this one though it is very popular.But when there is not much out there then patients in pain will take a risk...but its the looming competition that I mentioned above that really adds pressure... biosimilars are imminent and will encroach on their turf.
So the projections from the 2018 of some incredible $19.9 billion were starting to fall....indeed 2019 started to come off at $19.169 Billion, about a 4% drop year on year.
So here is the update...what was the revenue for 2020 with looming competition starting to encroach...
Let's put it to you - Question for you, What then should the revenue have dropped to in 2020?I would've thought around $18 Billion, maybe a touch less, competition is around the corner .
Competition coming, time to get worried?
Before you guess, lets see it as a graphic....
Jeepers this chart is telling, I mean look at the rise....look at the consistency as word of mouth spread....uninterrupted, pure and raw....GROWTH...year after year after year.
Now can you guys get an understanding of why I keep saying this is a long term investment. I understand that in mere months we may actually find ourselves at a 50% jump from where we are now in terms of share price...maybe in a year we are at 150%? But these aren't the figures I'm truly hanging around for...I'm looking for a deal eventually (NOT TAKEOVER, just distributional/partnership)....I'm looking for multiple indications but as the above chart shows..I'm looking for the growth on growth....yes I know thats years away...I can wait...can you?
Don't forget, you don't even have to wait without selling anything along the way, thats always an option and in my books, a fairly intelligent one, crystalise as we go...(not at all advice).
Ok getting back to the chart above, the black arrow, thats where YOU need to guess...what do you think Humira's sales fell to in a pandemic year, in a year with looming comp and even more awareness of the potential side effects of this drug?
Well if you guessed anywhere near 17 or 15 Billion, you are wrong...
The answer....
It went up.
My point? This is why I will hold a core...even I, despite all the research, all the contacts, the many hours...I cannot predict when we will go up, how long we will go up for...and what the future will hold. I do know this thing looks good, specially if you can wait, well, wait for a number of years!
Humira provides us with a great yard stick...we can easily compare trajectories and guestimate where we might be in 3 years, in 5 years and of course in a hopefully delicious 10 years from now. Sure it's a long time to wait...but I'm guessing (in my views) it could be a very exciting ride.
One more example for those that bother to remain in their seat right through the credits....(you know who you are).
Imagine back in the day you had just $5000 initial investment in CSL...you bought them for $2.50 a share...skip forward say to a double and you sold half your holding...you then determined you would never sell anything more, yep you left the last parcel in the bottom drawer somewhat like the ace poster @dtcope has posted about ----> The Bottom Drawer
....SO thats 2000 shares initially purchased, and you sold half, you have just 1000 left.
Mozz, 1000 shares ain't much mate.
Let me show you a calculation..... 1000 shares x $900....Err... Mozz, sorry to interrupt you mate, the share price of CSL today (well Friday night) was $306....
Wrong, you are forgetting share splits...factoring that in, it's like the share price is $900, or conversely its like buying each share for $0.76 since IPO.
That calculation works out to be a real looney $900,000 for your teeny 1000 shares.
@edski1 and any other Americans reading this? Substitute J&J for CSL...the figures are even better...over 75 years (yeah yeah I know we aren't going to live that long, cut that in half if you want, sell it after 37 years)...those babies went up 9,615 times....(adjusted for split and dividends)...
A core for all ages?
My bottom drawer is locked, I have lost the key and I don't care that it is lost.
hen I was young I used to love those Looney Tunes cartoons....very entertaining...Tonight I will look at a comparison to us, one that we have explored before, one that isn't quite as Looney as the original Looney Tunes gang but one that I hope you will find of benefit and perhaps entertaining along the way...Don't worry, it won't just be a re-hash tonight, I'm adding some new material to this story which we will cover too.
Well it has to be something of note? $17 million dollars of revenue
$50 Million?
I'm getting closer aren't I? $97 Million revenue?
Surely its not north of $100,000,000 ?? (That's $100 million USD)
(20min delay)