JNJ - Idorsia: The Foundation Is In Place And The Co. Is Ready For Great Success In 2023
Summary
- I will list major press events shared by Idorsia in 2022.
- I will offer my readers my personal commentary about each event.
- I will recap 2022 and comment on what is expected in 2023.
Prelude
I shared my first article on Idorsia ([[IDRSF]] and IDIA.SW) on July 16, 2019. I came upon the company while looking extensively at biotechs with excellent pedigree and notable achievements. Plus, I was seeking biotechs that Wall Street still needed to discover. In the case of Idorsia, the pedigree was the founder and principal stockholder of Actelion, who had just sold the company to Johnson & Johnson ( JNJ ) for $280.00 a share or about $30 billion. Johnson and Johnson wanted Idorsia's PAH drug, and they opted to let the Idorsia founder form a new biotech where they would keep control of the pipeline they had created. This happened in 2017, and as a result, Idorsia was created with an extensive channel of potential drugs already in place.
At the time of my original article, the stock was trading for $23.00 a share, quickly changing into the low $30.00 range. We are in the closing days of the fifth year of Idorsia's efforts to become a significant player in the competitive drug industry. And in all openness, 2022 has been a roller coaster ride, with most of the ride going downhill. In January, the stock was trading around $23.00 a share. By late summer, the stock had dropped to $10.00. In the interim, from this 52-week low valuation, the stock is currently trading in the mid-$15.00 range and appears to be forming a base at this level, where I hope to see 2023 bring a continuation of this upward trend. 2022 has been a brutal year for the DJI, NASDAQ, and most index funds. Nonrevenue and low-revenue biotechs have been significantly impacted due to this massive sell-off being experienced even as I'm writing this article.
With this article, I'm not going into a lot of the minutia of Idorsia's entire story and financials; I'm going to report on the essential details and events that have transpired in 2022. These details and events have put Idorsia at the point of being ready to accomplish the most critical need for a new biotech, which is having a revenue stream to support such an undertaking for growing and expanding. For newcomers to the stock, I would suggest you read the initial SA article for background on the company and its creation. I would also suggest you read some of the articles by another SA contributor, Micro Lysek: Idorsia: It's Time to be Greedy (Technical Analysis).
Significant Accomplishments by Idorsia in 2022
This was the first drug from Idorsia's pipeline approved by the FDA. Their goal and statement to shareholders were that they would deliver three medications approved for use in the general markets in short order. In the case of Quvivq, it would be the first insomnia drug where Idorsia had a market plan to market the drug in all the major global markets. Later in this article, you will see what significant markets are where the drug is approved or in the final stages of approval. Previous insomnia drugs were minimal as where it was marketed.
This was the initial prelaunch campaign to make the US aware of the issue related to those who suffered from insomnia, and a drug with a new method of addressing their problem would be on the market soon. A what better nationally known spokesperson for promoting a company and its product than Jennifer Aniston? From personal viewing, the Aniston TV spots were many and on prime TV programs. After the launch, they added TV ads featuring Lindsey Vonn, the Olympic Gold Medal winner. This fall, they had TV ads featuring Taye Diggs, a well-recognized actor. Each of these individuals suffers from insomnia, and in my opinion, their ads tell a compelling story about Idorsia's drug. One can't say that Idorsia hasn't done a superb job promoting the drug premarketing and now with QUVIVIQ in the market.
The Lancet is a peer-reviewed journal and, therefore, one of the most widely read publications for practicing physicians. Getting an article approved by peer group reviewers is a challenging task. Being selected gives a great deal of panache to the audience that needs this information. In this case, it offers some credence for how daridorexant would have merit for consideration by the prescribing physicians.
January 20, 2022: Idorsia receives Japanese PMDA approval for PIVLAZ (clazosentan) 150 mg.
The Japanese PMDA is equivalent to the FDA in the United States. Their review process and approval of a new drug involve a rigorous endeavor. This action by PMDA makes it the second drug approved for use in a significant market. This also makes the goal of achieving three medications approved in the near term now standing a two down and one to go for Idorsia. Only a few drug companies get two drugs approved in critical markets in the same month.
January 26, 2022: Idorsia expands its commercialization partnership with Syneos ( SYNH ) for daridorexant in Europe and Canada .
This action supports the massive worldwide effort that Idorsia is putting in place for how they market their current and future drugs that reach the marketplace. Syneos has extensive expertise in supporting the marketing efforts of drug development companies like Idorsia.
This is a significant accomplishment, as earlier developers of insomnia drugs have yet to make any concerted effort to have their products approved in European countries. Later in this article, I will list the countries that have opted to support daridorexant for their citizen's use.
Once again, this journal is a peer-reviewed process where publishing an article is challenging for the involved drug or company. This article is about the critical nature of what the patient is suffering-a hemorrhage involving the brain. What is unique about this article is the fact that it was released before the drug was launched for use in Japan by the attending physicians.
One should note that in April, product use was only one week. With the third quarter results now reported, in five months in just the Japan market, PIVLAZ (clazosentan) has achieved strong performance with net sales of CHF25.1 million since the launch in April 2022, with approximately 20% of aSAH patients being treated in September. Extrapolating Japan's performance of averaging CHF 5.0 million a month. By obtaining 20% of the caseload with the drug, with the drug being on an annual basis, it would be securing CHF60,000,000. This would be based on just one year of being on the market.
The population of the US is three times as many as the Japanese population. Extrapolating Japan's performance of averaging CHF 5.0 million and obtaining 20% of the caseload, with the drug being on an annual basis, it would be securing about $180 million here in the US. Add the US market projection to the Japanese market this would represent $240 million just for a 20% market share. This is based on less than one year on the market in Japan.
It should be noted that the Global Phase 3 for clazosentan, the recruitment of trial patients, has been completed, and final data should be available soon. With the apparent acceptance of the drug in Japan, we can hope this will be the case for the worldwide markets. It will be interesting to see whether the market has expanded in the soon-completed fourth quarter results.
With the official launch being in May, the first few weeks involved shipping the drug to the wholesalers for stocking the local retailers. Plus, they were getting samples for the attending physicians, which means there were few retail sales of the drug. Plus, with this being a new option for a cure to switch current patients or prescribe for new patients, there is a high degree of sampling to the physician for him providing samples to his clients. Also, at this stage of a new launch, there are significant discount options for those purchasing the drug from their local pharmacy. This means that the initial revenue stream can be impacted in a negative way for the drug company, which in this case is Idorsia. With the end of the fourth quarter of 2022, let us hope this drag on revenues will begin to show improvement. But always keep in mind, Idorsia will be generating revenue from a worldwide market.
This is the final stage of the European approval process for new drugs in the European Union countries. This culminates the recommendation made by the review committees reflected in the February 2, 2022, press release. Now individual countries can move forward in the process of their citizens being able to secure the Idorsia drug. In subsequent dates, I will show which countries are dispensing Quivivq to patients.
May 10, 2022: Phase 2A study in binge eating disorder.
This pipeline candidate did not show efficacy with the trial results, and the drug development for it was canceled.
I will offer more commentary with the subsequent December 20, 2022, press release about the status of this drug-it is good news!
Instead of making a secondary offering of stock that would have been dilutive to the current shareholders. Idorsia opted to secure cash with the building sale and a leaseback agreement. This generated cash to develop further their marketing efforts and the ongoing clinical trials they have in place. This was a prudent decision, in my opinion. With this deal, they secured CHF164 million.
These results put Idorsia's drug in the final steps for getting approval in a significant market in their worldwide efforts .
I will offer more details in the December 20, 2022, press release later in this article.
This means that 9.1 million US military service members (Active or Retired) and their families will be able to secure Idorsia's drug with no co-payments. And sadly, in this group of members, those having served in active war zones, the number suffering from insomnia represents a staggering number.
This further represents that Idorsia is actively marketing this drug for the worldwide marketplace-the first such effort at a medication designed to address insomnia.
November 16, 2022: Idorsia and Simcere enter licensing agreement for daridorexant in China.
This agreement didn't generate much of an upfront payment. However, it was prudent for Idorsia to enter this type of arrangement. The obstacles for foreign countries to work in the Chinese market are enormous. With this arrangement, Simcere, a China-based company, will fund the required clinical trials for China approval and then market the drug in the country. It is estimated that 200 million Chinese citizens suffer from insomnia. Idorsia got a $30 million upfront payment and will receive a $20 million compensation upon China's drug approval. Then Simcere will pay Idorsia a low double-digit royalty on drug sales. With Simcere handling the China efforts as opposed to Idorsia undertaking this process, the Simcere approach should expedite the process. Once again, Idorsia demonstrates that they are working the worldwide market with their drugs.
This is just another primary European market making QUVIVIQ available for their citizens. This further expands Idorsia's worldwide marketing effort with its drugs.
This was a 40-week study that showed safety and tolerability results when using the Idorsia drug for a year, which was no different from an earlier 12-week study. Long-term safety is an essential criterion for this type of drug.
This is Idorsia advancing a pipeline candidate into the critical Phase 3 stage for seeking FDA approval for one of their drugs. Lupus is a huge market based on the number suffering from this disease.
December 20, 2022: Idorsia submits New Drug Application to US FDA for aprocitentan to treat patients with difficult-to-control hypertension.
Within thirty days, we should hear if the FDA has accepted for final review this new application to the FDA for approving another Idorsia drug. If accepted by the FDA, the clock is on for endorsing a drug that has massive numbers on a worldwide basis needing new therapies for this condition.
Key Points to Consider
Daridorexant has been given FDA approval and is currently being marketed in the US. However, Idorsia will be the first insomnia drug company with a worldwide objective for selling the drug. Sleep insomnia impacts millions of people across the world.
Clazosentan has been approved and launched in Japan, and with only five months of effort, they have secured 20% of the patients using the product. The disease is a deadly disease, and clazosentan has been shown to remediate the issue being suffered. The drug is now winding up the Global Phase 3 trial, and I hope the FDA will move expeditiously as there is a high mortality rate for those suffering from this condition.
On December 20, 2022, Idorsia filed an NDA with the FDA with aprocitentan to treat difficult-to-control hypertension. This condition, worldwide, impacts millions and millions of patients.
When Idorsia was created five years ago, its mantra was to have three drugs on the market in quick order. One would be hard-pressed to find a five-year-old biotech company with an internal pipeline of two medicines approved through a strict protocol process in two countries. And in recent days has filed an NDA for another drug, aprocitentan, a drug addressing a significant affliction for millions of men and women.
Caveats
Idorsia uses a lot of cash due to its major pipeline and ongoing discovery program. Soon they will have their products being marketed worldwide-from Japan and China and expanding through the European nations and finally in the US. With the fourth quarter ending soon, the SEC filing for the quarter, and full-year data in early February, this will be an excellent time to see how revenues and expenses are meshing to support their broad-based approach to growing their company.
Conclusion
Since my first article in 2019, the slog has been both ups and downs for the company. With that said, my position initially was around specific parameters and goals I wanted to see emerging for the company. My first mistake was knowing the revenue goals would take some time to achieve. However, I opted to take my position in the company-not knowing a worldwide epidemic would stop all regular economic activity worldwide. Then I didn't see the full impact of 2022, being one of total havoc in the stock markets and real estate markets. What I did notice was that Idorsia continued to make steps toward achieving its overriding promise and goal---having three drugs approved and on the market. We are not there yet, as we have two down and one to go. December 20, 2022, NDA filing for aprocitentan puts us on a glide path to see the third drug on the market in potentially late 2023.
As I've stated many times-until I see a significant failure in the fundamentals I deem necessary for Idorsia to be successful, I will continue to hold!
Based on the significant accomplishments in 2022, let us hope that Idorsia's efforts will begin to pay off for us investors in 2023!
Good luck with your future investing decisions!
For further details see:
Idorsia: The Foundation Is In Place And The Co. Is Ready For Great Success In 2023