Summary
Due to the combination of a market downturn and other issues, Myovant shares depreciated substantially.
Nevertheless, there are powerful fundamental advancements that signal much more upsides going into New Year 2022.
The partial clinical hold for the SERENE trial is recently removed by the FDA. Orgovyx is poised to gain approval in Europe by mid-year 2022.
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The Good Brigade/DigitalVision via Getty Images The need for patience if big profits are to be made from investment. – Phillip Fisher (Warren Buffett’s Mentor) In biotech investing, when a company enters its commercialization phase the stock tends to trade with much volatility. After all, the market is now sizing up whether the approved drugs can deliver robust sales growth. If the drug ultimately becomes a blockbuster, your investment would become a bonanza. Even if the drug manages to procure several hundred of million dollars, the stock tends to trade upward in the coming years. Therefore, you should assess the approved molecule’s potential during this period of volatility.
That being said, I’d like to illustrate the aforesaid biotech investing principle through the case of Myovant Sciences ( MYOV ). With two approved therapeutics and label expansions brewing, I strongly believe that the company will enjoy a substantial sales increase in the next few years. As such, the stock will likely rebound to a new high. In this research, I’ll feature a fundamental update on Myovant and provide my expectation of this growth bio-equity. Figure 1: Myovant Sciences chart (Source: StockCharts ) About The Company
As usual, I’ll present a brief corporate overview for new investors. If you are familiar with the firm, I recommend that you skip to the subsequent section. Based in Basel Switzerland, Myovant is dedicated to the innovation and commercialization of medicines to serve the unmet needs in women and men’s health.
Powering the pipeline is a stellar franchise medicine dubbed relugolix, which is an oral gonadotropin-releasing hormone (i.e., GnRH) blocker. Marketed as Orgovyx, relugolix is currently indicated as an androgen-deprivation treatment for advanced prostate cancer (i.e., APC) in the U.S. The company is also waiting for its approval in Europe.
That aside, relugolix is innovated in a combination pill for other indications. Dubbed Myfembree, this combo is comprised of relugolix, estradiol, and norethindrone. As you can see, Myfembree is recently approved for the treatment of heavy bleeding associated with uterine fibroids. Interestingly, the company is expanding its label for moderate/severe pain associated with endometriosis. Figure 2: Therapeutic pipeline (Source: Myovant ) Orgovyx Launch Progress
Given that Orgovyx is the crown jewel of this pipeline, you should assess its commercialization progress. Since its approval and launch in late 2020, Orgovyx has treated a total of 8K patients. The net sales for the latest quarter are $18.7M which represents a 78% sequential increase from the previous quarter. Figure 3: Orgovyx commercialization progress (Source: Myovant )
Based on the said growth trajectory, Orgovyx should reach $100M in net sales for the next fiscal year. This makes sense because more patient adoption would drive additional sales increases. Looking at it another way, the steep curve does not show any signs of slowing down. While you can argue that $100M isn’t much, it’s still significant for a small company like Myovant. Figure 4: Orgovyx’s gaining more traction (Source: Myovant) Myfembree Market Penetration
Shifting gears, let us size up Myfembree’s prospects. Because Myfembree was approved and launched in the past few months, I do not expect substantial revenue yet. However, you see encouraging early indicators with only $1.7M in revenue in the figure below. That is to say, Myfembree is already distributed to roughly 2,200 providers. Figure 5: Myfembree early sales signals (Source: Myovant) Looking ahead, I expect much better sales results. After all, Myfembree demonstrated stellar therapeutic merits and thereby positioned the drug to generate substantially higher sales in the future. Specifically, the mean blood loss reduction with Myfembree was as high as 83.7% for these patients. There was also a significant reduction in hot flashes (i.e., 11%). In other words, when Myovant boosted its sales/marketing team, Myfembree’s revenues should correspondingly gap up because you have an excellent medicine. Figure 6: Myfembree therapeutic progress (Source: Myovant) Commercialization Partnership With Pfizer
Of note, Myovant shares took a nose-dive in October when Pfizer ( PFE ) disclosed that they will not exercise their sales/marketing rights for relugolix in the international […]
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