hello. I think the content went now behind paywall but i have a question about valuation. Apologies if i dont recall correctly what you did, but:
i don't think we can assume 100% of revenues in the US. Moberg would most likely get royalties, in the range of 10-20% of sales numbers in the US. If that is the case, if it takes on Jublia, it results in 80m revenues for moberg.
I doubt they would have the infrastructure to sell BY THEMSELVES 800m of terclara in the US.
Hi Rowan. Yes, the full investment thesis includes an excel spreadsheet containing the valuation model and the write-up contains a detailed discussion of each assumption that forms part of the valuation.
1. Using optimistic estimates, Jublia's revenue was roughly around 800 million. How much of that you think will flow to Moberg in US?
2. Not all toe nail fungal infections have to be cured. Some can go untreated. And, these infections are linked to old age and/or diabetes. Isn't this a risk for moberg?
Hello PD. Thank you for reading and for the question. Concerning your first point - I think MOB-015 should subsume most if not all of Jublia’s sales, even after Jublia comes off patent, subject to the major risk of pricing in the U.S. I think if Moberg pushes pricing too hard, that could cause an issue. But pricing aside, MOB-015 is a superior product to Jublia based on efficacy and ease of treatment. So unless Moberg makes MOB-015 completely unaffordable, there’s simply no reason for a prescriber to prescribe Jublia over MOB-015. Concerning your second point, I dont think it’s correct to say that this is a condition that doesn’t need to be treated. At the very least, the condition is very unsightly, causes pain and discomfort, and lowers self-esteem and makes people unwilling to engage in social interaction in scenarios where the condition is visible. For those with diabetes, the condition can actually progress into more serious infections, can develop into ulcers, and in extreme cases, can even lead to foot amputation. So my view is that the only real reason why anyone would not treat this condition is if the treatment options are ineffective or unaffordable. I think MOB-015 potentially resolves both of those issues, subject to how pricing is approached in the U.S. Thanks again for the question. I hope that is responsive but please let me know if you have any further questions.
Thanks, Divergent. I understand the part about diabetic patients and lowered self esteem. Won't US be the first time management will try to do a direct distribution ? I have so many more questions. But if am being honest, I see the upside with Moberg but I also see more risks. I have to spend more time on them.
I believe Moberg sold their previous product, Kerasal in the U.S., although i'm not sure how exactly that was done - whether it was by the company itself or through a contract sales organisation or some other arrangement. There's definitely a lot of things that could go wrong with Moberg. It's by no means a "cinch". You're right to think about the potential downside. I'd encourage you to spend the time to understand all the issues. Ultimately, it may be something you pass on and that's okay. We all have to stick to what we can understand and feel comfortable with.
Sure am. Should be able to find me by searching Divergent Capital. My handle is @Divergent7651. Out of curiosity, how did you find my blog if not through twitter?
hello. I think the content went now behind paywall but i have a question about valuation. Apologies if i dont recall correctly what you did, but:
i don't think we can assume 100% of revenues in the US. Moberg would most likely get royalties, in the range of 10-20% of sales numbers in the US. If that is the case, if it takes on Jublia, it results in 80m revenues for moberg.
I doubt they would have the infrastructure to sell BY THEMSELVES 800m of terclara in the US.
Excellent article. Do you also give a breakdown for the intrinsic values presented in your thesis?
Hi Rowan. Yes, the full investment thesis includes an excel spreadsheet containing the valuation model and the write-up contains a detailed discussion of each assumption that forms part of the valuation.
1. Using optimistic estimates, Jublia's revenue was roughly around 800 million. How much of that you think will flow to Moberg in US?
2. Not all toe nail fungal infections have to be cured. Some can go untreated. And, these infections are linked to old age and/or diabetes. Isn't this a risk for moberg?
Hello PD. Thank you for reading and for the question. Concerning your first point - I think MOB-015 should subsume most if not all of Jublia’s sales, even after Jublia comes off patent, subject to the major risk of pricing in the U.S. I think if Moberg pushes pricing too hard, that could cause an issue. But pricing aside, MOB-015 is a superior product to Jublia based on efficacy and ease of treatment. So unless Moberg makes MOB-015 completely unaffordable, there’s simply no reason for a prescriber to prescribe Jublia over MOB-015. Concerning your second point, I dont think it’s correct to say that this is a condition that doesn’t need to be treated. At the very least, the condition is very unsightly, causes pain and discomfort, and lowers self-esteem and makes people unwilling to engage in social interaction in scenarios where the condition is visible. For those with diabetes, the condition can actually progress into more serious infections, can develop into ulcers, and in extreme cases, can even lead to foot amputation. So my view is that the only real reason why anyone would not treat this condition is if the treatment options are ineffective or unaffordable. I think MOB-015 potentially resolves both of those issues, subject to how pricing is approached in the U.S. Thanks again for the question. I hope that is responsive but please let me know if you have any further questions.
Thanks, Divergent. I understand the part about diabetic patients and lowered self esteem. Won't US be the first time management will try to do a direct distribution ? I have so many more questions. But if am being honest, I see the upside with Moberg but I also see more risks. I have to spend more time on them.
I believe Moberg sold their previous product, Kerasal in the U.S., although i'm not sure how exactly that was done - whether it was by the company itself or through a contract sales organisation or some other arrangement. There's definitely a lot of things that could go wrong with Moberg. It's by no means a "cinch". You're right to think about the potential downside. I'd encourage you to spend the time to understand all the issues. Ultimately, it may be something you pass on and that's okay. We all have to stick to what we can understand and feel comfortable with.
Thanks Divergent. Are you on Twitter?
Sure am. Should be able to find me by searching Divergent Capital. My handle is @Divergent7651. Out of curiosity, how did you find my blog if not through twitter?
Reached out to you on the bird app