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May 4, 2012
Benlysta's Adventures In the Real World
Posted by Derek
Benlysta got approved for lupus last year, as the first new drug in the field in decades. But as noted at the time, it didn't exactly blow the doors out at the FDA, nor in the clinic. Now it's having a rough time in Europe, which makes things interesting for both Human Genome Sciences and their partners at GlaxoSmithKline.
Both the British (NICE) and German (IQWiG) agencies responsible for assessing the cost/benefit of new drugs have recommended against Benlysta's use. This adds some drama to GSK's recent offer of $2.6 billion for HGSI, which the smaller company turned down out of hand. Their case for a higher bid seems to be based on the market potential of Benlysta, but the arguing has begun over how realistic those hopes are. This is the sort of issue that gets settled with a sales price - or perhaps, in this case, just an upper bound. . .
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1. Alig on May 4, 2012 9:00 AM writes...
The bid for HGS is almost certainly because of darapladib. The market potential there blows away anything else in GSK's portfolio. Of course, the likelihood of approval for darapladib is unknown.
Permalink to Comment2. Anonymous on May 4, 2012 9:16 AM writes...
Yep, Alig is spot on. Much is riding on Darapladib
Permalink to Comment3. simpl on May 4, 2012 9:17 AM writes...
It is hard to take NICE too seriously, because they appear to find that new medicines add cost, and are therefore are all too expensive. If they were monitoring new cars, they wouldn't appprove of anybody buying one. In their paradigm, keep your model T going, or get a bicycle, it's healthier.
Permalink to Comment4. anon2 on May 4, 2012 11:42 AM writes...
As noted by Alig, there is no guarantee that darapladib will have clinical success and achieve regulatory approval, & less certainty for it to become a mega-profit- blockbuster. Too, darapladib will have its own share of problems (as do almost all new drugs) for patient tolerance & clinical up-take. And then there will be cost/benefit compared to, or in addition to, generic statins. Lots of hurdles to get back what has already been spent on HGS, plus the now proposed $2+b.
If one follows the financial bogs, releases, TV talking heads on HGS valuation, a big part of the "under valuation by GSK" is based on the concept that the recent share price has been depressed compared to what it was a number of months ago. And so, some investors (and insiders) want to get an EXPECTED projection in financial wind-fall based on this prior market concept. So so, sorry folks. A contrarian might even consider GSK’s current offer as too high, too generous, based on aggressively optimistic sales of current and/or future HGS-associated products. For those of who have seen multiple examples, how many compounds ever achieve their marketing projections when still in Phase 3 for their “upside potential”?
And really, has GSK’s management demonstrated a stellar ability in valuation of acquisitions? Sir Andrew?
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