ThromboGenics: U.S. Launch Dynamic Are Key Price Driver

ThromboGenics' (THR.BR) Jetrea is due to launch imminently in the US with a price 30% above prior guidance. The recent share price performance likely reflects expectations for premium pricing and with this now achieved, focus shifts to launch dynamics. Product launches can be difficult to forecast accurately, and the share price suggests high expectations. However, a positive EU recommendation in coming weeks is likely to provide near-term support.

Imminent US launch with premium price
Jetrea (ocriplasmin) received US approval on 18 October 2012 for the treatment of symptomatic vitreomacular adhesion (VMA). ThromboGenics plans to commercialise the product itself in the US with launch confirmed to commence 14 January 2013. The US price per injection is $3,950, a 30% premium to prior $3,000 guidance, although management had previously indicated this could be conservative.

US launch dynamics the key share price driver
The approved label is broad, with no restrictions on use in either macular hole or macular pucker/epiretinal membrane (scarring of the back of the eye). The c 30 US sales reps will initially target retina physicians that treat vitreomacular adhesion (VMA). Until now, the only treatment was invasive surgery. A permanent J-code will not be available until January 2014, with the temporary Q-code potentially increasing the administrative burden for use in the first 12 months.

EU approval could trigger small near-term uptick
Management expects a CHMP opinion this month, with the meeting scheduled 14-17 January, which would allow for formal EMA approval during March 2013 and potential launch Q213, in line with expectations. Following US approval, this is now largely de-risked but nevertheless could offer upside.

Valuation: Enterprise value of €1.5bn
ThromboGenics’s shares have more than doubled in the last 12 months following a licensing deal with Alcon and a successful Jetrea US regulatory review. Its end September €169m cash suggests an enterprise value of nearly €1.5bn. With EU approval now largely de-risked, expectations for market launch are high, with initial dynamics likely to dictate share price performance.

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