Fantastic body of work on this. Thanks for sharing.
Two main questions:
1) What will make Sublocade the preferred choice vs. the monthly version of Brixadi?
The Australian usage guide you linked to suggests that the weekly Buvidal (Brixadi's brand name in that market) can be used to fine-tune dosage before moving on to a monthly shot. So this is actually an advantage vs. Sublocade, but it's an *optional* advantage, i.e. if the practitioner and/or patient sees a reliability risk then they can go straight to the Buvidal (or Sublocade) monthly shot to mitigate the patient's ability to change their mind or make a bad decision (relapse) later.
Your arguments (and reading a bunch of the patient posts in one of your links above) convinced me of the value of a monthly shot as a superior way to do MAT. So I'd guess that there's enough market for two competitors, but pricing/margins then come into question. Do you have any data on market share/pricing in other countries where the two compete head-to-head? I suppose to the degree that governments are the primary/only payor that this may or may not be helpful for calibrating expectations in the US.
You mentioned Sublocade having first-mover advantage; is that advantage demonstrable in similar scenarios (i.e. a second highly effective medicine comes on the market to compete with the first)? Any lessons from what happened to market share/pricing?
2) Intent to maximize Sublocade/run off/sell vs. maintaining going concern status.
You touched on this quite a bit. I think your take is reasonable but I'm not sure how to read the tea leaves apart from that.
For instance, the below article mentions Indivior pursuing a cannabis addiction medication, and that Indivior could own the molecule's IP owner up to $100mm for certain milestones. I'm guessing those milestones are akin to full commercialization of a drug, but do you take this as them keeping their options open, or a clear sign they're looking to keep functioning as a going concern?
Has Scopia stated its ideal direction for the company?
Also along these lines, the recently announced buy-backs are great in the sense of shareholder returns but they do nothing to beef up the balance sheet. I don't have any concept of what it would cost to ramp Sublocade all the way to $1B but already returning capital to shareholders seems like the move of a company that wants to focus on what they already have. I know many companies want/try to do both and maybe at 85% gross margins they can. So I don't have an opinion here as to how to interpret the buy backs but would be interested in your take.
Thanks again for sharing.
I really like your approach; it occurred to me that one of my biggest successes in a stock pick was due in large part to the fact that it wasn't investable by institutions (tiny float). This later changed and I was fortunate to participate in a massive upward re-rating.
Given where broad valuations are, I believe that one has to selectively pick from the "market of stocks" rather than just own the stock market in order to be very successful.
I'm looking forward to digging into your second article in the near-future.
Fantastic body of work on this. Thanks for sharing.
Two main questions:
1) What will make Sublocade the preferred choice vs. the monthly version of Brixadi?
The Australian usage guide you linked to suggests that the weekly Buvidal (Brixadi's brand name in that market) can be used to fine-tune dosage before moving on to a monthly shot. So this is actually an advantage vs. Sublocade, but it's an *optional* advantage, i.e. if the practitioner and/or patient sees a reliability risk then they can go straight to the Buvidal (or Sublocade) monthly shot to mitigate the patient's ability to change their mind or make a bad decision (relapse) later.
Your arguments (and reading a bunch of the patient posts in one of your links above) convinced me of the value of a monthly shot as a superior way to do MAT. So I'd guess that there's enough market for two competitors, but pricing/margins then come into question. Do you have any data on market share/pricing in other countries where the two compete head-to-head? I suppose to the degree that governments are the primary/only payor that this may or may not be helpful for calibrating expectations in the US.
You mentioned Sublocade having first-mover advantage; is that advantage demonstrable in similar scenarios (i.e. a second highly effective medicine comes on the market to compete with the first)? Any lessons from what happened to market share/pricing?
2) Intent to maximize Sublocade/run off/sell vs. maintaining going concern status.
You touched on this quite a bit. I think your take is reasonable but I'm not sure how to read the tea leaves apart from that.
For instance, the below article mentions Indivior pursuing a cannabis addiction medication, and that Indivior could own the molecule's IP owner up to $100mm for certain milestones. I'm guessing those milestones are akin to full commercialization of a drug, but do you take this as them keeping their options open, or a clear sign they're looking to keep functioning as a going concern?
https://www.drugdiscoverytrends.com/indivior-eyes-cannabis-disorder-treatment/
Has Scopia stated its ideal direction for the company?
Also along these lines, the recently announced buy-backs are great in the sense of shareholder returns but they do nothing to beef up the balance sheet. I don't have any concept of what it would cost to ramp Sublocade all the way to $1B but already returning capital to shareholders seems like the move of a company that wants to focus on what they already have. I know many companies want/try to do both and maybe at 85% gross margins they can. So I don't have an opinion here as to how to interpret the buy backs but would be interested in your take.
Thanks again for sharing.
I really like your approach; it occurred to me that one of my biggest successes in a stock pick was due in large part to the fact that it wasn't investable by institutions (tiny float). This later changed and I was fortunate to participate in a massive upward re-rating.
Given where broad valuations are, I believe that one has to selectively pick from the "market of stocks" rather than just own the stock market in order to be very successful.
I'm looking forward to digging into your second article in the near-future.