Post by tomsylver on Jul 15, 2017 14:09:22 GMT
Tesaro Shows Good Potential With Major Approvals This Year
07.12.2017
Summary
* Tesaro awaits the FDA decision for Rolapitant IV.
* Rolapitant oral was approved by the European Commission earlier this year.
* Tesaro is working on marketing its newly approved Zejula treatment, the first of its kind for ovarian cancer.
By S.Mitra, MBA (ISB)
Tesaro Inc. (NASDAQ:TSRO) has shown strong operating performance this year so far with significant drug approvals from the FDA and the European Commission. The company became the first FDA approved PARP inhibitor provider with Zejula while its Rolapitant oral was approved by the EC earlier this year. However, the operating performance did not translate to corresponding stock market results as the stock is currently trading over 30 percent lower than its 52 weeks high of $192.94, making it an interesting investment opportunity for short as well as long term investors.
Tesaro is currently awaiting the FDA result for its Rolapitant IV, designed for preventing chemotherapy induced nausea and vomiting (CINV) in HEC patients. The likely date of the decision is in October and may prove to be a solid catalyst for the stock. The company runs high chances of receiving the approval despite its earlier debacle. Tesaro was served a Complete Response Letter (CRL) by the FDA which requested additional information regarding the in vitro method utilized to demonstrate comparability of the drug product produced at the two proposed commercial manufacturers for rolapitant IV that were included in the NDA. Since the letter did not raise any concerns about the safety or efficacy profile of the drug, the sentiments regarding the potential approval are positive.
Another reason for upbeat sentiments is that the company recently won approval for Varuby from the European Commission. Varuby is the oral tablet form of Rolapitant. The company plans to initiate country wide launch of the drug in Europe in the near future. With these drugs in its portfolio, Tesaro is in position to grab a chunk of the CINV market which is expected to be worth $1.8 billion by 2020 in the US alone. The company’s presence in Europe will provide it with additional economies of scale.
Apart from this upcoming catalyst, Tesaro has another trump card up its sleeve. The company recently won the FDA approval for Niraparib, which it is going to market as Zejula. The treatment is designed as a maintenance treatment for adult patients afflicted with ovarian cancer. The FDA approval is significant as Zejula is the first FDA approved PARP inhibitor that does not require BRCA mutation or other biomarker testing. This makes the company one of the key players in the PARP inhibitor market. It also enhances the market potential for the drug as Zejula may be marketed to the patients with or without BRCA mutation. The drug also has high potential as it may be prescribed without needing any diagnostic test, thus expediting the treatment process.
The company announced the market availability of the drug in the market in April this year. The Wholesale Acquisition Cost (WAC) of ZEJULA is set at $9,833 for a one-month supply of ZEJULA at a dose of 200 milligrams once per day. The company reported a strong response to the treatment as in its inaugural month the drug had nearly 500 prescriptions written. The drug has also been added to the NCCN Clinical Practice Guidelines by the National Comprehensive Cancer Network (NCCN). Overall, the drug shows a solid potential for the company as the ovarian cancer market is expected to touch $5.2 billion figure by 2025. Additionally, Tesaro further endeavors to expand the indication label for the drug, which will boost the market potential exponentially.
Apart from a solid drug portfolio and robust pipeline, Tesaro is also in good financial health. For its first quarter of the year, the company reported 600% Year over Year jump in net product revenue to $2.1 million. The revenue figure is expected to be further boosted as Zejula fortifies its position in the market. The company’s net loss stood at $136.7 million, up from a net loss of $91 million it had suffered in the corresponding quarter of the previous year. However, the increase in loss was mainly due to increase in Selling, general and administrative expenses, which ballooned to $69.3 million during the quarter. Again, the increase is mainly attributed to launches of Varubi and Zejula in the U.S. and Europe, increased headcount, and higher professional service fees. Despite the increase in expenses, the company ended the quarter with $672 million in cash and cash equivalents, in line with the guidance provided by it earlier. With its current burn rate, the company has a solid runway ahead. Its liquidity position will be further fortified as Varubi and Zejula gain ground in the US and Europe.
In comparison to the upside, the company’s downside is rather mild. However, it is likely to face stiff competition in the coming time from the likes of AstraZeneca and Clovis Oncology, which have olaparib and rucaparib respectively in the ovarian cancer market. Both the companies are looking to expand the indication label to include the use as maintenance therapy. However, Tesaro is all set to have first mover advantage. The stock provides a good opportunity at the time for initiating a position as it is currently trading over 30 percent lower than its 52 weeks high of $192.94. The stock is expected to provide not only short term returns on account of upcoming FDA decision, but also long term potential as the company builds its position in the market with its new drugs.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in TSRO over the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
07.12.2017
Summary
* Tesaro awaits the FDA decision for Rolapitant IV.
* Rolapitant oral was approved by the European Commission earlier this year.
* Tesaro is working on marketing its newly approved Zejula treatment, the first of its kind for ovarian cancer.
By S.Mitra, MBA (ISB)
Tesaro Inc. (NASDAQ:TSRO) has shown strong operating performance this year so far with significant drug approvals from the FDA and the European Commission. The company became the first FDA approved PARP inhibitor provider with Zejula while its Rolapitant oral was approved by the EC earlier this year. However, the operating performance did not translate to corresponding stock market results as the stock is currently trading over 30 percent lower than its 52 weeks high of $192.94, making it an interesting investment opportunity for short as well as long term investors.
Tesaro is currently awaiting the FDA result for its Rolapitant IV, designed for preventing chemotherapy induced nausea and vomiting (CINV) in HEC patients. The likely date of the decision is in October and may prove to be a solid catalyst for the stock. The company runs high chances of receiving the approval despite its earlier debacle. Tesaro was served a Complete Response Letter (CRL) by the FDA which requested additional information regarding the in vitro method utilized to demonstrate comparability of the drug product produced at the two proposed commercial manufacturers for rolapitant IV that were included in the NDA. Since the letter did not raise any concerns about the safety or efficacy profile of the drug, the sentiments regarding the potential approval are positive.
Another reason for upbeat sentiments is that the company recently won approval for Varuby from the European Commission. Varuby is the oral tablet form of Rolapitant. The company plans to initiate country wide launch of the drug in Europe in the near future. With these drugs in its portfolio, Tesaro is in position to grab a chunk of the CINV market which is expected to be worth $1.8 billion by 2020 in the US alone. The company’s presence in Europe will provide it with additional economies of scale.
Apart from this upcoming catalyst, Tesaro has another trump card up its sleeve. The company recently won the FDA approval for Niraparib, which it is going to market as Zejula. The treatment is designed as a maintenance treatment for adult patients afflicted with ovarian cancer. The FDA approval is significant as Zejula is the first FDA approved PARP inhibitor that does not require BRCA mutation or other biomarker testing. This makes the company one of the key players in the PARP inhibitor market. It also enhances the market potential for the drug as Zejula may be marketed to the patients with or without BRCA mutation. The drug also has high potential as it may be prescribed without needing any diagnostic test, thus expediting the treatment process.
The company announced the market availability of the drug in the market in April this year. The Wholesale Acquisition Cost (WAC) of ZEJULA is set at $9,833 for a one-month supply of ZEJULA at a dose of 200 milligrams once per day. The company reported a strong response to the treatment as in its inaugural month the drug had nearly 500 prescriptions written. The drug has also been added to the NCCN Clinical Practice Guidelines by the National Comprehensive Cancer Network (NCCN). Overall, the drug shows a solid potential for the company as the ovarian cancer market is expected to touch $5.2 billion figure by 2025. Additionally, Tesaro further endeavors to expand the indication label for the drug, which will boost the market potential exponentially.
Apart from a solid drug portfolio and robust pipeline, Tesaro is also in good financial health. For its first quarter of the year, the company reported 600% Year over Year jump in net product revenue to $2.1 million. The revenue figure is expected to be further boosted as Zejula fortifies its position in the market. The company’s net loss stood at $136.7 million, up from a net loss of $91 million it had suffered in the corresponding quarter of the previous year. However, the increase in loss was mainly due to increase in Selling, general and administrative expenses, which ballooned to $69.3 million during the quarter. Again, the increase is mainly attributed to launches of Varubi and Zejula in the U.S. and Europe, increased headcount, and higher professional service fees. Despite the increase in expenses, the company ended the quarter with $672 million in cash and cash equivalents, in line with the guidance provided by it earlier. With its current burn rate, the company has a solid runway ahead. Its liquidity position will be further fortified as Varubi and Zejula gain ground in the US and Europe.
In comparison to the upside, the company’s downside is rather mild. However, it is likely to face stiff competition in the coming time from the likes of AstraZeneca and Clovis Oncology, which have olaparib and rucaparib respectively in the ovarian cancer market. Both the companies are looking to expand the indication label to include the use as maintenance therapy. However, Tesaro is all set to have first mover advantage. The stock provides a good opportunity at the time for initiating a position as it is currently trading over 30 percent lower than its 52 weeks high of $192.94. The stock is expected to provide not only short term returns on account of upcoming FDA decision, but also long term potential as the company builds its position in the market with its new drugs.
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in TSRO over the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.