Edison Investment Research Limited , 25 August 2015 .
Yondelis – two potential approvals in H215
The PDUFA date for the FDA review for Janssen’s (J&J) NDA application to market Yondelis in the US as a second-line treatment for soft tissue sarcoma (STS) is 24 October. In July Zeltia announced that it had successfully cleared another hurdle in the approval process, with the manufacturing facility for the Yondelis active ingredient trabectedin having passed FDA inspection as acceptable for supply to the US market.
FDA approval would trigger a $10m milestone payment from J&J. Zeltia will also receive tiered double-digit royalties on net US sales from J&J, and in our model we apply an effective blended annual royalty rate of 15%.
Partner Taiho Pharmaceutical filed for approval in Japan in January 2015 for the use of Yondelis to treat advanced STS. With orphan drug designation in Japan, a decision could be made as early as September 2015. Zeltia would receive a $10m milestone on Japanese approval.
With Yondelis approval milestones worth $20m ($10m for US, $10m for Japan) potentially receivable in the second half, we forecast FY15e EBITDA to be €27.0m, 5% ahead of FY14.
Valuation: Unchanged at €4.65 per share
Our valuation is unchanged at €1.03bn (€4.65/share), with increased R&D and capex spending offset by the roll-forward of the DCF model.
We see significant potential upside from Yondelis approvals in the near term .
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PM01183: Phase III begun in ovarian, pending in lung
PM01183 (a Yondelis follow-on) has generated highly encouraging clinical data in ovarian cancer and SCLC, which was presented at ASCO in June. A Phase III trial in platinum-resistant ovarian cancer was initiated in June. The company is finalising the design of a proposed Phase III trial in small cell lung cancer (SCLC) after positive data from a Phase Ib study; the Phase III is expected to start Q415.