Pinned straw:
Have had some time to analyse the presentation and come up with the best way to monitor upcoming progress,
I feel The simplest metric to track is the net increase in users per month after the churn along with the gross to net. This was reported as the Tx / month.
Short version, it probably still isn't as bad as it looked and has been sold down heavily, won't be a 6 month success story but even on the lower end case things will be ok in 12-18 months time and they could be close to a profit, main takeaway is cash on hand after the raise and factoring in the debt facility a raise shouldnt be needed.
Welcome anyone's thoughts/comments on this.
As noted in a separate post, when you remove the free units and factor in the PA units that get retrospective approval it isn't as bad as it looks. The high deductible dip in the given example didn't seem to be as bad in the year after the launch but that remains to be seen, I have put a dip in year 1 post launch but not year 2.
Another thing to note is the adherance rates, it was 79% overall and 95% for people in the auto refills,
The 79% adherance rate on the surface looks low but it is most likely related to the free units being shipped each month (mid 20%, assuming these aren't eligible for refills and these account for most of the discontinuing users.
If this assessment is correct, the actual adherence rate is still quite reasonable.
All this being said below are 3 cases to consider, both with an example for GTN of 30 and 35.
All have annual opex of 80m to allow for the extra reps, COGS as noted below, and the bodor royalty is 5% of net sales.
*need to confirm the opex in the quarterly, might still be hard to tell with the foray into digital that didn't go well but should be a good indicator at least.
Case 1:
Maintain the net addition of 1150 users on average per month as has been the case so far, GTN tracks to 33%, with a dip being overserved in high deductible season.
Not sure if the bigger table will be readable, but COH bottoms out at 70m, with a cashflow positive month in June 2026.
Case 1b:
GTN peaks at 30 with 1150 / month
Case 2:
Net Addition of users gets up to 1500 / month with the addition of more sales reps and an S curve effect with prescribers becoming more productive.
Cashflow positive August 2026, COH bottoms at 60mil.
Case 2b: GTN peaks at 30 with 1500 / month
Case 3:
Growth underwhelms and has peaked at 1150, continues to add at 750 / month with additional reps.
Case 3b: GTN peaks at 30 with 750 / month
@Schwerms I’m back on the case (albeit now entertaining northern hemisphere visitors for a few days). Hopefully, some time next week I’ll published an independent analysis. I started building the model yesterday.
Im going to drive it off: number of prescribers, as the potential subscriber base of 4,500 are penetrated over a 24 month timeframe. (Assumptions of 80%, 90%, 100% penetration).
Monthly new scripts will be driven off "New scripts per subscriber per month. Again, apply a couple of scenarios,…. Maybe 2.5 and 3.0.
Conservatively, I’ll assume only 79% of scripts are fulfilled. And then the big parameter is "Average number of refills per script". That’s a big unknown given limited time in the market, but perhaps I’ll model 6 and 8 (Need to think more about this), and then assume each customer churns off after this.
The model will then generate a plateau in revenue when incoming new scripts, from a basically limitless market( given low % penetration) are in balance with discontinuations. That plateau will occur some time between 24 and 36 month from launch, as I’ve set it up.
I’ll test the output of that as to what % of the market presenting for treatment are receiving a script.
Next is GTN. I haven’t assessed that yet, but it seems prudent to allow for a continuing Q1 minor drop off. I’m thinking of modelling scenarios of it getting to 30% and 35%. In future years, I think $BOT will tighten up on the amount of 100% copay, as one driver. They’ll do this rationally, driven by an analysis of whether patients who initially got it for free, eventually managed to get reimbursed.
That will pretty much give me what I need to model some plausible revenue scenarios going out to end of FY28.
And then there’s cost base, which is easier, given I think we know how many reps they’ll have.
On digital, I’ve listened back to my recording of the presentation. Basically, they’ve held off a major digital marketing push for now simply on the basis of rationale capital allocation. I think they are seeing superior returns from adding incremental reps, and they are still in the mode of fine tuning the digital channel, so they didn’t have anything fact-based to say about that. I’m not going to model any contribution from digital.
I don’t want to share my output numbers yet, as it’s work-in-progress, but I am liking what I am seeing directionally aligned with what you are showing.
Entirely possible that there has been a complete market over reaction, and, as we get 6 and 12 months of additional history, the value becomes apparent. (By the way, this is not unusual for single product pharmacos after launch! Which get to the benchmark management shared. That was a gallant but, as it turns out, in vain attempt to stave off the market response we saw!)
I would not be buying off the work I’ve done so far, but equally, there’s no way I’m selling!
Anyway, I will give a proper update next week some time. And it will be great to have your work to triangulate with.
So for now, I’m still a believer.