At today's web-cast, Mr. Hassan highlighted Schering's top three not-yet-US-approved drug candidates -- including Bridion, or sugammadex:
. . ..We believe we're hitting the sweet spot on R&D and patent exclusivity. . . .
-- Fred Hassan,
CEO Schering-Plough,
November 24, 2008
But wait, Fred -- FDA rejected that application -- in June 2008. I know you are working on it with FDA -- just as three years ago, you predicted the launch, in 2009 to 2010 of several of the drug candidates you now "aspire" to have initially-filed with FDA. So, each of those is about three to four years behind where you earlier said each would be.
Gee, that's an oddly-shapen "sweet spot", Mr. Hassan.
4 comments:
So, today's article:
Schering-Plough: The Reviews Are In
Posted By: Mike Huckman | Reporter
cnbc.com | 25 Nov 2008 | 11:23 AM ET
Schering-Plough raised the curtain yesterday on its drug development pipeline for the first time in three years and analysts, for the most part, liked what they saw. Investors are responding to a slew of bullish research notes out this morning and are sending SGP shares higher--at least, in early trading--for the third day in a row.
Seamus Fernandez at Leerink Swann writes, "We believe that yesterday's R&D update supports our view that SGP is currently undervalued & attractive for long-term investors."
JPMorgan's Chris Schott says, "We believe (Monday's) meeting can begin to shift the focus of the story toward the company's pipeline (especially as data becomes available over the next 1-2 years)....These pieces of the story have been overshadowed by the uncertainty surrounding the cholesterol JV (joint venture with Merck on Vytorin and Zetia) and the potential currency impact to EPS (earnings per share) that has dominated shares over the recent months." Of all the American big pharmas, SGP has the highest percentage of sales coming from overseas, so it is the most exposed to the foreign currency exchange rate.
Steve Scala at Cowen and Company writes, "SGP's pipeline appears very promising with multiple novel compounds addressing unmet needs across a broad range of therapeutic areas."
Bernstein's Dr. Tim Anderson says, "The longer-term outlook with SGP remains the best in the group...a function of the company's low generic exposure and solid late-stage pipeline."
And Catherine Arnold at Credit Suisse titles her research note, "The R&D Cup Runneth Over."
Arnold, Barbara Ryan at Deutsche Bank and Jami Rubin at Goldman Sachs are the only women at the major equity research firms covering big pharma. Stock analysis is still very much a male-dominated field. And that was no more in evidence at the SGP meeting yesterday than during the morning bathroom break. There was a line at the men's room, but my producer, Ruth, told me there was no line at the ladies' room.
One of the "5 Stars" (that's what SGP is calling them) in its late-stage development pipeline that the company highlighted on Monday was Bridion for side effects from anesthesia. The Food and Drug Administration recently kicked it back saying it's "not approvable." But it is already approved in Europe--something Schering made perfectly clear in a kind of "take that! FDA" gesture by hanging a big banner above the entrance to the building where yesterday's meeting was held.
Recently, SGP Chairman and CEO Fred Hassan has publicly voiced concerns that Europe is usurping the United States' drug innovation leadership. The company announced yesterday that it has a meeting scheduled with the FDA to talk about a potential path forward for Bridion. Stay tuned on that.
As is common practice of many companies at analyst/investor meetings, Schering handed out goodie bags to attendees on their way out. It was filled with over-the-counter SGP products like sunscreen, Claritin and Dr. Scholl's gel insoles. But also in there was a bottle of Miralax for constipation! Is Schering trying to tell some of the analysts something?
I'm surprised by the seemingly 'high' level of enthusiasm.
What I find fascinating is the idea that two of the five "stars" have effectively been "dinged-out" by FDA -- and the remaining three are about four years behind schedule. Yet this is cause for celebration?!
The most perplexing part is that Vytorin/Zetia earnings and cash flow were going to be used to fund/file all these new NDAs, and conduct the ramp-up/captial spending to prepare for launches.
That source just dired up.
And yet, none of these analysts seem to notice that Schering may not have the cash to fund this many simultaneous major projects, given the continuing (and accelerating) swoon in the cholesterol franchise's earnings.
I would have thought it would be more credible to explain the bullishness as a harbinger of a buy-out/bust-up. But not this crew.
No, the truth is that none of Schering's five stars would fill the pipeline gaps of most of the other Big Pharma players.
So it goes.
I expect Schering will be a sub-$15 stock again -- as soon as more IMS scrip data is seen -- Crestor is crushing Vytorin, day by fateful day.
Thanks for the comment -- do stop back!
I agree with your thoughts/comments.
It is funny how the investors tout how much each new item has the potential to make. Many of the new entities are from Organon. And yet, Organon wasn't a real bargain that any other pharma wanted. Nor was it a company that could do it alone. So, really what is behind the curtain?
And the overall risk of any of these agents failing is pretty high. I cite Sanofi's rimonabant-a safe an effective drug in Ph3, approved in Europe (I think for the latter). Weren't they (both investors and Sanofi) claiming it to be a sure fire blockbuster? It was to cure obesity and the smoking habit.
And now?
So, I wonder, do you think that maybe it is a way to pump up the company for the buy-out/bust up? Much like Organon was promoted to S/P for the buy out?
Condor,
I have to take issue with the claim of rimonabant being safe and effective.
If you simply look at the structure it's really nasty and you expect to have problems like liver and hematologic toxicity.
Even so it was not approved by the US due to a high incidence of depression, which is not a trivial side effect. Since that raises the spectre of suicide and other psychiatric side effects.
Safety is always relative. and we clearly don't get all the information that agencies get, and it's becoming more and more apparent that they don't get all the information they should. Plus the actual emphasis in at least the FDA according to multiple internal sources I have (in contrast to the PR reported by the press) is approve, approve, approve, and do not ask questions. So for a nonapproval to come through the safety signal has to be so strong that it can't be ignored.
Salmon
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