Most of NKTR’s current marketed drugs are not worth all that much due to the dreaded “tiered” royalty compensation structure. NKTR has already spent the milestone payments.
It is something that less successful biotechs due until they can be the more successful biotech, bit it kills returns on extremely rare to succeed and enormously hard work and high risk drugs.
ISIS pharma (they changed their name for obvious reason, and at the moment I forget what it changed to, although have had a few discussions about this on the Rule Breaker board) has probably the largest and most factory like pipeline of any company in the history of the world.
However, their business strategy has been to do the same to all of their drugs, and not take the chance and wholly own anything. A recipe for mediocrity.
Fortunately NKTR is beyond that point, and is now able to behave like a more successful biotech.
There is 181 and 214 as the material drivers. All we know about 181 is we have no idea. In most other fields it would be a shoe in for approval but opioids…depends on its pricing, but does anyone have a clue as to what to expect in peak sales?
214 is more predictable. Estimates I have seen, are peak sales a little above $1 billion. However, does this make any sense at all? That seems awfully low for a drug of this magnitude. Given NKTR’s 65% cut, be nice to know what to expect for NKTR’s current valuation.
Has anyone who has held or looked into this stock for a greater duration than myself come upon any good peak sales estimates?
I do not want to rely on the rest of the pipeline to support valuation, and I would only invest in NKTR at this point if we could look at a 4x from here.
Obviously my investing style is a little more concentrated from most, so I want to understand the economics here. In my experience, a drug like 214 will peak sell at much higher than $1 billion or so a year. Perhaps these estimates are third line usage, as is the way these things usually go when initially approved even though it seems such a waste to wait for the third line of therapy. But that is for those with better expertise to devise. I am just trying to understand the economics better. Particularly from those already with 4x on their hands.