In this article I will shortly explain the main reasons why I would buy BCRX before the Q2 EarningsReport. In case you're looking for some deeper DD, I suggest you check out the other BCRX DD article I wrote.
- 2021 Q1 ER Beat
On May the 6th, 2021 BCRX presented Q1 Earnings Report data managing to Beat Analysts estimates. Basically what matters from this Q1 ER is that it was the launch of Orladeyo, and Analysts wanted to see a decent amount of money generated by it. They were expecting Orladeyo sales to top $3.1MM and Orladeyo actually generated $10.94MM, this is a 353% sales beat
The consequence of the ER beat was an increase of 24.06% in the SP
It's really important to mention that revenues generated this Q1 only came from the USA.
This Q2 Orladeyo has been approved in Japan/Europe/UK aswell, adding new sources of revenue.
Orladeyo sales are expected to grow exponentially each quarter. Main reason for it is that it has been approved in the countries mentioned above. The other reason is that the amount of patients they treat will slowly score up as insurance companies allow their clients to be treated with this drug.
The data displayed below shows the amount of patients using Orladeyo in 3 or 4 pharmacies which provide information to Bloomberg. This numbers help us to have an idea of how Orladeyo is doing in terms of gaining new patients, but it's not 100% accurate.
If we sum up the numbers from the Q1 we get a total of 43 patients, in the first month of Q2 there are 38 new patients already, meaning Orladeyo nearly managed to get in a single month all the amount of patients it gathered in the Q1, reasuring the exponential growth. This numbers will keep rising now that Orladeyo is approved in additional countries.
- Orladeyo™ (Berotralstat) oral pill
Basically Biocryst has a drug called Orladeyo, which is the first Oral approved treatment used to prevent swelling attacks in people with hereditary angioedema (HAE). It is estimated that HAE affects 1 in 50,000 people.
Orladeyo was firstly approved in the USA December the 3rd, 2020. Q4
Orladeyo received Japan NHI price listing approval April the 14th, 2021. Q2
Orladeyo received European approval April the 30th, 2021 Q2
Orladeyo received UK approval May the 12th, 2021 Q2
Orladeyo is ranked the #13 most expensive drug in the USA market. The price shown below $37,308 is approximately what patients must monthly pay to access the drug.
In the USA there currently are 10,000 patients, 7500 diagnosed and treated, 1700 diagnosed but not treated, 600 treated but not diagnosed.
Physicians expect to prescribe Orladeyo for over 41% of HAE patients. Conservatively thinking, taking 7,500 patients ( the diagnosed and treated ones ) out of the total 10,000 pool in the USA, with over 41% of patients prescription ( page 16 ) we would conservatively aim for 3,075 patients.
The amount of money that must be yearly paid to access Orladeyo in the USA, is equal to 485,000$
On November the 5th Biocryst undergone an agreement with Torii Pharmaceuticals. A local Japanese company that will be in charge of getting new patients to be treated with Orladeyo in Japan and commerzialing it.
Japan has around 2,500 HAE patients, and Biocryst conservatively expects to at least reach 500 patients.
The amount of money that must be yearly paid to access Orladeyo in Japan, is equal to $248,500
Approval of Orladeyo in Japan issued a $15MM milestone payment from Torii.
BioCryst will receive tiered royalties ranging from 20% – 40% of Japanese sales.
It's estimated to be around 12,000 HAE patients in Europe. Following the physician prescription of over 41% of patients to prescribe (page 16) for Orladeyo. We get a total of 4,920 patients in Europe.
Since pricings and jurisdictions work in a different way in Europe, the amount of money each patient will have to pay for Orladeyo is expected to be around or above Japan's $248,500/year. This number should soon be confirmed.
With this yearly prices and the amount of patients defined before, we get the following results.
USA – 3,075p x 485K = 1,491,375,000$
Japan – 500p x 248,5K = 124,250,000$
EU – 4,920p x 248,5K = 1,222,620,000$
Summing it all up we get $2,751,270,000. From that number we have to subtract 123,100,000$ making it a total of $2,628,170,000. The sustraction happens as a result of the undergone Royalty agreement with Torii Pharmaceuticals and Royalty Pharma.
Having in mind the discussed numbers before, Orladeyo alone will be generating $2,628,170,000 a year, using the average mid-cap Biotech company multiplier x7. We get a total of $18,397,190,000 meaning an increase of $104,46 in the stock price.
CEO himself confirmed multiple times that the company will not need to do offerings anymore. As shown in the pic below, current cash runaway takes them into 2023.
We are just about to witness how BCRX evolves from being a small-cap company to being a high-cap one. This will mainly happen due to the revenue generated by Orladeyo and the potential of BCX9930.
Basically from now on each ER will be a new catalyst for BCRX. Considering how Orladeyo is still in an early launch state the revenue it generates will exponentially keep growing, so will the SP.
Orladeyo undoubtly is an awesome asset for BCRX, a cash-cow. But the one drug in BCRX's pipeline that has the most promising future is BCX9930. An Oral inhibitor in PH3 which treats 8 different diseases as of now, aimming for a potential 40B market size by 2025. Deeper information about it can be found in the following article BCRX – The Embarrassment of Riches.
I currently do have a position in this company, my average entry price being around the 4$ range. In my opinion BCRX probably has the best safe/reward ratio in the bio-world and I do not plan to sell my shares yet.
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