Paradigmers, always fun to take a rough stab in the dark and try and come up with some sort of estimate on how the future will look for us. But projecting is riddled with hurdles. I mean just take a look at RRV results and how long and how many times they was delayed. Or even the TGA program...it's been delayed several times but I'm not necessarily complaining, things do take time and there are hurdles, there are unforeseen delays.
So as we bide our time waiting for the next round of super news...let's tonight take a rough guess based on how we stand today at how some sales may play out? This guesstimate is so rough that I need to swap some segments around so let's do the disclaimers first before anyone gets too excited about my musings.
DISCLAIMERS
These are so rough figures it's not funny. I was employed as Merchandise Planner for a number of years so I do enjoy the figures. BUT there are plenty of caveats. No one knows the future, no one knows exactly what hurdles will crop up and it's impossible to say what might happen in the next few months let alone years and how it might all play out. One simple massive take over offer and who knows, we may all go weak at the knees and tick that little YES box on the takeover acceptance form and it's all over!
These are quite optimistic figures I'm just toying with and same with the timing's? Well of course they are rough and it may not work out like this at all...This is pure speculation....keep that in mind as your read on.
ABBVIE AND HUMIRA
Just as this went to press the new poster, TeddyWestSide88 (welcome to our club) mentioned the mighty Humira, quite a timely mention as that forms the basis of my comparison tonight.Ok so why am I mentioning AbbVie with their world's best selling drug? 1 Well a number of reasons but the primary one is the fact that to me it is the single most relevant yard stick we can go by. It's a drug that's closely related to what we are attempting to address, Rheumatoid Arthritis (RA) as opposed to Osteoarthritis (OA). We have covered the differences before but the summary of it is the fact that RA is an autoimmune disease and it affects more than one joint at a time whereas OA is more of a wear and tear or even injury type disease. I'll be covering this topic off in more depth later on in the year.
A GROWTH PROFILE
Right...so what was the trajectory for them and how can it be applied to us?Well Humira got approved late 2002..(the last day in fact of that year)...It took them just TWO YEARS to achieve a milestone in sales. No Paradigmers, I'm not talking $100 million...I'm talking a full $1 BILLION...in just two years. Can you just imagine us going from nothing, zero sales to this figure in two years? It still seems like a dream but that could actually happen to us?!
From there it went nuts. In just a further 2 years they reached another Billion dollars. Skip forward to 2013, Humira was "the world's best selling drug" 2...Sales at that point? Some $10.7 Billion...so they crossed the $10 B mark in 10 years. Remember this fact as we will touch on it again later.
How many markets were they in at this stage? 10? ....more? 30?...try 60! How are WE going to feel when OUR drug sells in 60 markets....? Now you want to talk growth right? Finally it's all about the growth...if a company grows, it's share does too...In just half a decade more from there, Humeria's sales doubled AGAIN! Now that's crazy growth.
QUIZ TIME
Oh go on, admit it, you don't mind these quizzes. I can see it in your smirk.
After a FULL 16 odd years of sales, what was the growth of Humira from 2018 to 2019? Now before you answer don't forget, there are bio-sims and competition looming AND they have AE's complete with a compulsory Black Label warning from the FDA.
A) Negative 14% ?
B) Anemic as it's been a lot of years and their growth must be dwindling now?
C) Under 4%, inflation runs at about 2.5% or so...4% would be a good bet.
D) No idea, can't we just get on with the answer Mozz?
(Yeah my answer was D) too... 7% positive growth...after so many years and on such ridiculously huge sales, that's an achievement! Paradigmers..if we are on X Billion per year in year 16...what's 7% of X Billion anyway? An even larger X is the answer.
Ok we need to see a breakdown of what actually happened in terms of Humira. Paradigmers, take a look at the below chart, it's so much of an insight for us.
Look at all the stuff we can learn from the one pic above...
1) In just the very first full year, their revenue was around 200 million. That is a massive figure...in just one year! So this initial year for us in terms of OA will in theory be the year 2023. But before you new guys look at me funny and think what, we gotta wait till 2023 for all this circus to start? There is MPS which I think we have a good chance of garnering revenue as early as mid 2021? There is also Aussie Revenue as part of TGA and that should take place mid next year?So there is hope on the horizon for some sales! Finally!
2) Take a close look at how that graph goes NUTS thereafter. Specially in 2007 and 2008. The percentage growth in those formative years was massive.
3) Paradigmers, what did I just say... I mean point 2) just above...in 2007...2008 and even 2009 the growth was massive...Guys, that was GFC years. Them and soon us, are Recession Resilient. People in pain don't give a TRUCK about recession, they need their pain to STOP and they will pay for this to happen. We clearly have seen the uptake of Opioids and despite the destruction, it continues.
4) In this very powerful picture we see a number of indications that were addressed....This came after their initial FDA approval...this also will happen to us. We will not just have OA, MPS and the two smaller brothers RRV and Chik. Later, I believe we will have a number of simultaneous indications we will apply for...it's already in the making...Hay Fever will get re-looked at, we have a number of patents for all sorts of conditions not just limited to Heart and COPD. . These will be err... (dare I say it) Boosters on our space type vehicle. What LOX3 (Liquid Hydrogen and Oxygen Mix) does for a r*cket...iPPS will do for our Share Price.
Video showing the difference between simple fire burning in normal Air -v- fire burning in Liquid Oxygen. Add a second propellant (Liquid Hydrogen) and you get the idea, it's a little long but you can just watch till the 1 min 52 sec mark to get the idea, it's a nice demo if you have time.
BUT WAIT...
But Mozz isn't done with the crazy info and facts.Humira isn't a great drug.....what?! I mean it has nasty side effects, all is not well with it. This is no iPPS...we so far have a completely clean bill of health, there have been no AE's with iPPS. Humira has had a number of fatalities and severe effects.4 It still has done so well...It's under patent protection till 2023 and AbbVie have even got a few contracts in place with rivals for them to compete with a royalty kick back in place for AbbVie. Amazing. Paradigmers, we won't have such problems...there will be NO direct same-molecule rivals and no generics for a very long time.
EXPENSIVE?
Humira is quite expensive, did you know that the price has tripled from 2006 to 2017? It was a 'cheap' $16,636 back in 2006....come 2017 and you pay $58,612 for a one year supply! That's also quite reassuring for us that there is some scope to sustain higher pricing equating to some pretty amazing revenues.
DURABILITY
If we show decent durable results spanning over 9 or 12 months...I'm sure we aren't going to be selling for just $2500 per course.
Now Paradigmers, If you are on Humira you typically need this once a fortnight or so....and you need to pay a lot...well your insurer does...or the Government. From the payer's point of view it's better they fork out in terms of rebates/PBS etc rather than you being admitted to hospital for a spell costing even more money to the tax payer.In our case there will be, as part of our official OA trial, a study of the durability. We have covered this here -----> DURABILITY. But in summary, our drug lasts, oh boy how it lasts. I'm not talking about taking the drug once a week...or even once a month...the observed durability is looking like once a year!
You have your first course of 6 weeks and then that's it for 12 months. Paradigmers we have in our very midsts patients that write to us on here that haven't had a single booster for years and are still not observing any resurgent pain from the awful days full of pain pre-iPPS that they suffered. It is for this very reason I personally conclude that $2500 is a low hurdle for us in terms of final price...if proved in the trial, we should attract north of this figure.
SUPERIMPOSE ME
Ok below is the rough trajectory for Humira from their official start of sales back in 2003:
Calculations to superimpose their trajectory on us: Here is the method to my madness.
Step 1 Track Humira's sales growth path (above)
Step 2 Do a simple Layover of us onto them and re-calc the years:
Par-folk, we aren't comparing apples to apple with the above..we are forgetting one bit of detail...but important detail all the same. The RA market is just 10% of OA.Now I'm not going to take the above and simply multiply it out by x 10..I will add a conservative factor of 3. Why? Well you get to economies of scale, not everyone will necessarily use iPPS or maybe it won't work on everyone..there may be other factors I haven't considered and hey, it's always good to UPOD (Under Promise and Over deliver).
Step 3 - Applying a conservative multiplier factor of 3 to account for OA being 10 times RA, results in this:
An extra caveat. Yes Step 3 looks a bit crazy but we have to also remember that we may not keep all those yummy sales, we may only get 20%...Let me tell you, If I'm still kicking around in 2035 for instance I wouldn't be too upset having to deal with JUST $8.1 Billion of revenue as a 20% royalty.
YOU MEAN THERE IS MORE?
Step 4...You mean there is more? Paradigmers...OA isn't the only thing we are tackling, you gotta add something in for MPS...and the two smaller indications of RRV and CHIK. Don't forget there were almost a million (perhaps with some overlap with OA) that had this nasty Viral Arthritis affliction too.
LAST KICKER I PROMISE
When we get that "Hope you are sitting down" Trading Halt news that we have a massive deal with some Big Pharma partner, this will no doubt entail some sort of up front payment (along with subsequent milestone payments).That will give us a massive injection of cash. With this cash we will be free and able to pursue other indications, set up and fully fund other trials. There are many for us to explore. Many.
ARE YOU BEING REALISTIC? (CAN SOMEONE PLEASE BRING MOZZ DOWN OFF THE CLOUD HE IS ON?)
I know what you are thinking, I was in your shoes a while back too...I was thinking, yes yes OA is big...yes sure we can address a number of these pain and inflammation related stories but C'mon Mozz mate...buddy...how big can we really get? Paradigmers, dear friends....Humira despite it being Number 1 in 2019....ISN'T the lifetime sales highest achiever.
What I'm saying to you is that if you add up ALL the sales Humira has achieved in the last 17 years it comes out to be some $80 Billion. That's sizeable... But guys, what is more amazing can be seen in Figure 2 below. The number one all time cumulative life selling drug was in fact Lipitor...and you know what they have achieved? $148 BILLION US in sales.5 Now THAT is what kind of a Blue sky we may one day be looking at. I'm getting excited and pleased by a full $1 increase in the last 5 days...what am I going to feel when we appreciate multiples of this?
Humour me for one sec...that's $148,000,000,000...but that's USD...in our little Aussie Battler dollars it's $224 Billion
CONCLUSION
Quite speculative projections here. The reason for this post was two fold, to try and emulate what a sale projection for us could be, based on something real, based on something in a similar area, Humira and RA and a few other indications they are prescribed for. Secondly, I wanted to bring some new information to the table, namely just how Humira sales have progressed since inception (well, approval), I hadn't see that chart before though I have tried to look for it. I had the last 8 years or so but not the chart from day dot.
When I computed and read that crazy $60 Billion figure of ours in 2039 in my little spreadsheet I was thinking to myself how the hell are we ever going to get to that figure, is it real? I've surely done something wrong (Yes I know we won't get all that revenue due to negotiated deal/royalty etc but still that's the underlying revenue figure). Quite simply Humira achieved 20 Billion in 16 years. As I said, OA is ten times RA's size. I've used a factor of just 3 times and that doesn't include any other indication we will one day address. New guys? This is what you have bought into.
(20min delay)
