Rayaldee - the elephant in the room.

Couldn't agree more jahred. I'm at a loss as well. It certainly looks like rayaldee is a blockbuster drug worth billion of dollars per year yet it appears to be overlooked in the market. Not to mention, approval (March 2016) is right around the corner.

10K a year seem a bit high to me. I can see the 5K per year for treatment as a very viable option. Could be a HUGE drug for Opko. If sales go well that drug alone could be worth $25/share.

I think the reality is somewhere in the middle. The fact is that many CKD patients can maintain normal PTH levels with two old cheap drugs, calcitrol and 50k unit vitamin D.

Undoubtedly insurers will insist that a patient must first fail this standard treatment before they would authorize an expensive newer drug.

That being said, there is a significant number of long term CKD patients that do ultimately fail on the old drugs. The body begins to down regulate its response to the large daily doses of vitamin D (it perceives that there is too much D in the body and releases an enzyme to block its absorption).

When this happens the body compensates by leaching more vitamin D out of the persons bones causing two very dangerous results: osteoporosis and cardiovascular calcification. These side effects of SHPT are most serious for elderly patients.

So, from my understanding of SHPT, that is the most pressing need that will be addressed by Rayaldee. There may be other indications of which I am unaware that would make the drug appropriate for a larger universe of patients. Also, because the formulation of Rayaldee is new and proprietary allowing for longer half-life and superior absorption of vitamin D, there may be other applications and off-label uses.

Given the increased recognition of the vital importance vitamin D plays in a persons overall general health, this new formulation of D may have a wide range of potential uses. Let's hope so, eh?

DocFrosty and Semihoud. Very good points. I recently read the Laidlaw and Co research report. The model they have has peak revenue from Rayaldy at 600MM and thats 5-10 years out. With all the other inputs they get to a price target of $22. I think they will hit 600MM in year two or three. Going well past a billion after that. Rayaldy is truly an Elephant and when it surprises to the upside the current valuation will be laughed at, in my opinion. The off label uses for this drug should also be very very substantial. Cancer is huge, elderly could be big with bone loss, potential uses are profound. Long!

That's laughable, this drug has no middle ground it will be a huge hit or a dud. When I say dud I mean zero. If the cost is only $1,000 you're looking at over 1 billion.. I too would love to see how they come up with 600 million peak.

I have a friend I grew up with known for 30+years, and his wife is a Nephrologist here in the city.  Very intelligent lady from Iran.  I asked her about Rayaldee, and this was her response.  I can assure all of you that she is a very very prominent Nephrologist in this region.

She said:

"if such a drug were available and did what it is supposed to be able to do, it might be given to almost everyone with end-stage renal disease. I would think that is worth a risk of investment in the company."

I think the pricing of rayaldee is going to be key. There has to be some middle ground where the additional cost is worth the improvement over the older drugs but still gives Opko a nice profit. If they can nail that sweet spot, they should be able to drive large sales.