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Pancreas Cancer

KEK was posted 08/31/2000 10:03 pm by Joe
E-mail Address: jdhertel@dcwis.com

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Hi again, ironic I just replied to your e-mail, but did not discuss this subject. I am not in SUPG at this point, but I was waiting for an early indication on the clinical trial success. Currently, I am in Celgene(CELG), boy is this thing going through the roof! Anywy, here is Prudential's current stance on SuperGen's situation. If 10-15% of the participants are in violation of the protocol, these people will have to be "replaced" to meet the protocol minimum patients. Here is the excerpt: Prudential Excerpt Only: 09:40am EDT 31-Aug-00 Prudential Vector Healthcare (Drake, Peter) SUPG: DELAY AND UNCERTAINTY SURROUND RUBITECAN; DOWNGRADE TO HOLD* We are downgrading Supergen to Hold from Strong Buy based on growingconcerns over the clinical progress of lead compound, Rubitecan, thecompany's oral anti-tumor candidate for pancreatic cancer, and theprimary force behind our valuation of SUPG shares.* Rubitecan is in a Phase III multicenter, randomized trial designedto include a total of 1,800 patients. Our previous assumptions werepredicated on a Q4'00 Phase III trial completion, an NDA submission inQ1/Q2 of 2001, and approval in the 2H01.* After discussions with various industry sources, we now expect thetrial to be significantly delayed. We believe that the company will notbe able to complete enrollment until Q2'01 and will not submit its NDAuntil Q4'01. By our estimates, this means a Q3'02 approval and a Q4'02launch.* The delay appears to stem from significant issues in managing thetrial. Specifically, we understand that physicians are having difficultyin keeping patients within the protocol parameters and that the trial issuffering from an overall lack of stringent monitoring. Indeed,management has indicated that as many as 10-15% of the patients arecurrently ineligible from study inclusion due to protocol violations.* Adding to this general uncertainty, we understand from industrycontacts that partner Abbott Laboratories is concerned over the progressof the trial. SUPG management confirmed this with us yesterday.* In light of this delay and future uncertainty surroundingRubitecan's clinical development, we have revised our model and believe amore appropriate valuation on the shares should be $20. We derive thisvaluation by applying a 50 net income multiple to our 2004 EPS estimateof $0.77. Rubitecan - The Primary SUPG Value DriverRubitecan, an oral anti-tumor drug candidate for pancreatic cancer, is ina Phase III trial. While Supergen has other anticancer products (onemarketed, others in early-stage development), Rubitecan, in our opinion,is the primary value driver behind the shares. The drug aims to addressa significant unmet medical need. Approximately 28,000 Americans willdie of pancreatic cancer this year; of those diagnosed, only 19% surviveone year post-diagnosis and 4% are alive after 5 years. Because it isorally active, Rubitecan offers a convenience advantage over the currentstandard of care, Lilly's Gemzar, which must be administeredintravenously. Gemzar, which offers only a slight survival advantage andmostly quality of life advantages, generated $456 million in sales forLilly in 1999. With the previous timeline, we had assumed thatRubitecan's blockbuster potential would contribute $115 million in salesand royalties to SUPG in 2002.

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*DISCLAIMER: This page is an unmoderated forum, and the opinions expressed herein do not necessarily reflect the viewpoint of The Johns Hopkins Medical Institutions. Patients are advised to consult their personal physicians before making any medical decisions.
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