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Done a bit more digging re revenues in the early years. The product got CKD approval in late 2017 which partly resulted in the 72% increase 2017 to 2018. Accrufer is definitely a better product and has a wider label but is starting from a standing start.
Auryxia – annual US revenues
2016 - $32m
2017 - $60.6m
2018 - $96m
2019 – $111m
2020 - $128.9m
Shandy
I get you point on efficiency however fast and hard would be my way. Try to grab the land while there is an opportunity. Additionally the more noise they make the more the product becomes known in the industry and thus more exposure to a potential purchaser.
If Accrufer is successful then STX will get taken out. There is no way that one of their bigger competitors will let them grow. Question is what the current shareholders would see as fair value and that depends on the success and speed of the launch, so a bit circular. AOP and Inventages will already have in mind an acceptable exit price. Around 200p per share would be my guess.
https://www.biopharmadive.com/news/akebia-keryx-to-merge-creating-1b-kidney-disease-company/526761/
Also interesting is the timing of the merger. 6 months after CKD approval for Auryxia and sales rising c80% as a result the 2 companies merged creating a $1bn combined company - so Keryx was valued at c$500m despite revenues being a fraction of that valuation.
If Accrufer revenues are decent in first 1 or 2 years the bigger pharmas will sit up and notice.
Redwine - STX approach seems to be sensible IMHO - allocating resources to the highest prescribers first and then working down. It's a cost effective approach and this data is widely available in the US (less so in other countries).
100 doctors/consultants write 1,000 iron supplement prescriptions per year so that's 100k. Getting 10% of this market pretty quickly doesn't seem that hard - 10k at $1k each (assuming a few months of pills per prescription) is $10m alone.
The only risk i can see is that traction could be slower than we would like and it takes time for revenues to grow. However, i think revenues estimates are quite conservative so there is contingency build in.
Great post Shandy.
I know I'm PI projecting but this surely has multi bagger potential from here. The goals STX has set itself or at least the ramp up and Hardmann paid for research communicated externally seem very very cautious. I understand why but the flip side is if they come in over the next year better than expected we should see a significant move up.
One thing I have been thinking is if the cost /number of the sales team is enough. For the above story to fit together they need to be penetrating the market hard and fast. I doubt whether this is possible with only 30 reps.
Keryx and Akebia Therapeutics merged in late 2018 so finances are a little confusing but i've done some digging and it appears Auryxia was definitely not an overnight success.
In fact it's early years performance was poor. However, in late 2017 FDA extended its use for CKD and that's when sales appeared to kick off.
Based on the financials below it appears revenues were
2017 = c$56m, 2018 = $96m and 2019 = $111. The confusion was caused by the merger in Dec 2018 when 2018 revs were quoted as $6.8m (but clearly for only 1 month of the year, post merger).
What is encouraging is that without CKD FDA approval Keryx still managed $56m revenues in 2017. Not only is Accrufer a better product but it has much wider FDA approval (both IBD and CKD etc). Obviously we are coming from a zero start but half of that in Year 1 would at least cover costs.
Auryxia
• Pro forma unaudited Auryxia sales in 2018 were $96 million, representing 72% growth over 2017.
• Total Auryxia prescriptions for 2018 were approximately 163,000, representing 85% growth over 2017.
• Net product revenue was $28.9 million for the fourth quarter of 2019 compared with $6.8 million in the fourth quarter of 2018(1), and $111.1 million for the full-year 2019 compared to $6.8 million for the full-year 2018(1). Pro forma net product revenue for the full-year 2018, inclusive of pre-merger net product revenue recorded by Keryx Biopharmaceuticals, Inc. (Keryx), was approximately $96 million.