Gary D. asks, "Do you feel any better about Avanir Pharmaceuticals ( AVNR) yet or is 2012 going to be a repeat of 2011? They really blew it on having enough insurance coverage for patients who wanted to use Nuedexta but couldn't afford it or their insurance or Medicare didn't cover it, but as of January 1st, it looks a lot better. They turned their focus to long-term care facilities which should help, and of course with almost a year under their belt they should have got through some of the bumps and bruises." Avanir had a rough year, no doubt. The launch of Nuedexta for pseudobulbar affect (PBA) disappointed, with fiscal 2011 net sales of $6.1 million well below expectations. Avanir shares lost half of their value as a result. This year has to be better for Avanir. Could it be any worse? The company appears to have learned some hard lessons and is making changes like adding sales reps to target long-term care facilities and assisting patients with reimbursement and co-payment issues which should help grow Nuedexta sales this year. Expectations have come down to more sensible levels. Short sellers, at least the few I know who were involved in the stock last year (profitably), have moved on.
On a related note, excuse me while I rant a bit about sell-side analysts. Here's what Wedbush's Greg Wade wrote on Avanir in a Dec. 18 note to clients: "Nuedexta sales continue to be the main driver for the stock and have been somewhat slower than initially anticipated by the Street. Given that AVNR launched Nuedexta in early February 2011 with little to no prior marketing work and as a new therapy for a completely new indication, early slowness in the launch is understandable. With several quarters of Nuedexta sales now in hand, we have enough data from which we believe we can accurately project the launch trajectory ..." Nuedexta sales in 2011 were "somewhat slower" -- really? That's the understatement of the year. And if Wade believes early slowness in the Nuedexta launch was understandable, why did he issue hugely bullish forecasts? Last May, Wade was predicting Nuedexta sales of $9 million, $55 million and $178 million for fiscal years 2011, 2012 and 2013, respectively. Today, his 2012 and 2013 Nuedexta sales estimates have been slashed to $34 million and $75 million. If Wade didn't have the data necessary to make accurate predictions during the early days of the Nuedexta launch, why was he so overly optimistic? My apologies to Wade. He's certainly not the only Avanir analyst who got the stock wrong last year. But I don't understand why analysts, generally, make excuses for their mistakes instead of just owning up to them.
I've been thinking about some of the staggering sales estimates being tossed around on the size of the hepatitis C treatment market if (or when) an all-oral regimen is approved. With an estimated 5 million to 7 million people in the U.S. and Europe infected with hep C (split between diagnosed and undiagnosed), the commercial market opportunity could be $20 billion or $50 billion or $100 billion or $200 billion (!) depending on assumptions made about drug pricing, market penetration, diagnosis rates and access to treatment.
I took a somewhat dim view of the clinical benefit for colon cancer patients derived from the Bayer- Onyx Pharmaceuticals ( ONXX) drug regorafenib. Reader Steve W. thinks I'm missing the point: "On your article regarding regorafenib, a few things you didn't mention that you probably should have to place regorafenib in proper perspective. The six weeks is the median survival, with half of patients doing better and half doing worse, an important point with the investigators already saying the responses were variable, with some patients exceeding survival expectations by more than a year. You also describe three side effects as 'severe,' but when compared to the side effects caused by other approved drugs for colon cancer, they are very similar to those side effects and actually occur in a relatively small percentage of patients. This kind of context is important, and when left out results in your readers getting an inflated sense of risks and a minimized sense of the benefit of this new drug. With nothing new coming out for colon cancer for quite a few years, this is an important advance and FDA should be hurrying to approve it."
Finally, Robin is ticked off about the photo I posted to Twitter last week showing Mannkind ( MNKD) CEO Al Mann presenting to an almost-empty room. "Regarding your stupid Twitter photo on Al Mann at healthcare conference today: 1) there were at least twelve hot shots in the room. You didn't bother to find out who they were, I did. 2) Most people were already needing to leave the conference early; not Al's fault. 3) An 8 am timetable is probably not beneficial to Al Mann after people have been up at fancy dinners and drinking all night the evening before. Most people don't make it to an 8 am conference (hangovers are common). 4) There is something really, really mentally ill (sadistic) about a person who is obsessed with Al Mann, bashing him constantly. If you hate the stock that much, it's already depressed in the price per share, then quit reporting your shabby homework on it. You look unprofessional, worse, you look stupid and ill informed. I think you are paid to SHORT, kind of like a prostitute who has to grovel for cash every day. You just can't make it on your own, like the rest of us professional investors. Why does TheStreet employ a guy who can't do decent homework? YOU ARE A GOOD LAUGH. SEE YA AT APPROVAL WITH MNKD!!!" --Written by Adam Feuerstein in Boston. >To contact the writer of this article, click here: Adam Feuerstein. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein. >To submit a news tip, send an email to: email@example.com. Follow TheStreet on Twitter and become a fan on Facebook.