The competing drug of Chemgenex's Ceflatonin (its drug for the...

The competing drug of Chemgenex's Ceflatonin (its drug for the treatment of chronic myeloid leukemia, CML) is a product that is produced by European Pharmaceutical Giant Novartis called Gleevec.

Gleevec is easily Novartis's second biggest selling drug in its list of its top 20 sold drugs. It grossed some US$2.2BN in sales in calendar 2005, with growth of 32%.

Chemgenex, in yesterday’s announcement reported the incidence of CML as "occurring at about 1 to 2 per 100,000 people". This is misleading in terms of the perception of the size of the market. The term 'incidence', in this context, refers to the annual diagnosis rate, or the number of new cases of Chronic myeloid leukemia diagnosed each year, which in the US can be calculated at around 4500. The US prevalence, of CML is 40,000-50,000.

See www.wrongdiagnosis.com/c/ chronic_myeloid_leukemia/prevalence.htm

Given CXS’s progress you would expect it is in Novartis’s interests, with its absolutely massive acquisitional capacity (balance sheet carries US$10BN in cash reserves), to take out this junior to protect and enhance Gleevec’s dominant market position. Watch for some serious moves in any case.