Thanks for posting this Hottuna - did MacBank provided figures...

Thanks for posting this Hottuna - did MacBank provided figures (P&L) with forecasts as well.
I would love to see the full research note with figures if you are prepared to share?

My thoughts below…

Acrux
Generics hitting the shelves
Event§ We update our view on ACR in light of recent US prescription data and launch
of new generic TRT gels.
Impact

“Testosterone market continues to shrink: Weekly prescriptions for TRT
gels continue to decline, with the last week of June yielding on 77k scripts,
down 25% vs. pcp. With the FDA safety review ongoing and advertisements
for class action against TRT manufacturers continuing, we believe a
turnaround to volumes will unlikely occur anytime soon.”

Agreed – in volume terms, not value terms, which was flat at the last reporting.  Extrapolating volume prescriptions based on a weekly result is crazy in my opinion.  The real impact will be rebating, as this is what hurt the Q1 result in my opinion.  I’m not too optimistic here – but so long as they come in with a result around the Q1 figure it will not be totally disastrous!!
§ Generics have begun to enter the market: Testim’s branded generic has
been released in the US and in two weeks has captured 4.2% of market
volumes. Another generic gel from Upsher-Smith (USL) will also hit the
shelves in the coming weeks, although it remains unclear whether it will be
directly substitutable to Testim. Whilst these generic products will not be
substitutable for Axiron, we believe they will still impact sales due to insurers
inserting the generic gels into preferred tier 1 levels of their formularies (which
carry lower or zero co-payments for users) in the coming months.

So MacBank is saying limited direct substitution from generics but will still impact sales due to insurance… possible, but that’s not a huge threat in the short term… they are drawing a very long bow here!!!
§ Branded competition also intensifying: The FDA in May approved a nasal
testosterone product (Natesto), whilst an oral testosterone product (Rextoro)
is currently under review with a decision expected in November. Given the
relative attractiveness of these new product forms for patients (tablets in
particular), their launch onto the market could place further pressure on the
gels.

My understanding is Nasal products are not appealing – the small is apparently terrible… Consumer acceptance will limit appeal here.  As for oral – remains to be seen.  I have heard that oral testosterone can have bad health effects on the kidneys?
§ We make downward revisions to our numbers: We have revised down our
TRT market assumptions (we now assume 77k per week with no growth), our
price assumptions (-5% pa due to escalating competition) and share
assumptions (we now assume flat share for Axiron). These changes, together
with a revision of our animal health revenue forecasts, result in a significant
downward revision to our valuation.

Really? What is this analyst smoking – VERY WEAK arguments presented above. Nothing new here. I suspect they are suiting the target price to the shorting clients?