BioCompounding

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[BioCompounding @BioCompounding]

The first biosimilar breaks the ice, but the second triggers the price drop📉

Data shows a 2nd biosimilar launched within 3 years nearly doubles ASP pressure (dropping from -23% to -40% by Year 3).

While 3+ entrants drive prices down to -48%, marginal returns decline after #2.

[BioCompounding @BioCompounding]

Technically speaking, yes it should but hard to say as biosims are harder to make. But after 10 years who knows.

[BioCompounding @BioCompounding]

The first biosimilar breaks the ice, but the second triggers the price drop📉

Data shows a 2nd biosimilar launched within 3 years nearly doubles ASP pressure (dropping from -23% to -40% by Year 3).

While 3+ entrants drive prices down to -48%, marginal returns decline after #2.

[BioCompounding @BioCompounding]

There is new regulation companies are trying to push to reduce the regulatory costs, that should drop cost to under 100m.

[BioCompounding @BioCompounding]

I believe the above picture is a good overview of what happens. Prices drop about 48% after more than 2 biosimilars come to market. I don’t believe it makes sense for anyone else to enter the market after that. Takes about 6-7 years to make a biosim, cost 100-300m

[BioCompounding @BioCompounding]

Interest stat I came across
$ISRG does 60k procedures a week
It’s competitors do 50k procedures a year combined.

I believe that sums up who is the leader and how far ahead they are.

Read our full deep dive on $ISRG here -
https://t.co/mZsni2cKRs

[BioCompounding @BioCompounding]

Despite the upcoming "patent cliff" (118 biologic expiries until 2034), biologic originators might be safer than expected. Only ~10% of expiring biologics (12/118) currently have biosimilars in development!

High entry barriers = longer commercial tail for pharma originators

[BioCompounding @BioCompounding]

@jfais20 Which ones are strengthening?

[BioCompounding @BioCompounding]

Conclusion: $EW isn't "cheap" on a vanilla DCF. You just need real conviction in a specific combination of duration, margin, and risk-premium assumptions to own it here.

Full model + reverse DCF breakdown in the https://t.co/qUlMwaJewR

What's your read?

[BioCompounding @BioCompounding]

Built a full DCF on Edwards Lifesciences ($EW). Base case fair value: $52. Stock price: $91.60.

So, I reverse-engineered the model to find out what the market has to believe to justify $91.60. 🧵

Read the deep dive and find the model here: https://t.co/qUlMwaJewR

[BioCompounding @BioCompounding]

Despite the upcoming "patent cliff" (118 biologic expiries until 2034), biologic originators might be safer than expected. Only ~10% of expiring biologics (12/118) currently have biosimilars in development!

High entry barriers = longer commercial tail for pharma originators

[BioCompounding @BioCompounding]

@OptionWell @AndyT_hk Very clear. Thank you!

[BioCompounding @BioCompounding]

@OptionWell Will they continue to be your 2 targets? 😊

[BioCompounding @BioCompounding]

Interest stat I came across
$ISRG does 60k procedures a week
It’s competitors do 50k procedures a year combined.

I believe that sums up who is the leader and how far ahead they are.

Read our full deep dive on $ISRG here -
https://t.co/mZsni2cKRs

[BioCompounding @BioCompounding]

@OptionWell @AndyT_hk How do you decide which stocks to write puts on? You seem to be quite nimble so curious how you decide, Jeff.

[Samuel Hume @DrSamuelBHume]

Protect the kidneys, and the kidneys will protect the heart.

Made with Images 2.5 - zoom in on the details, this really is very good:

[BioCompounding @BioCompounding]

Severe aortic stenosis affects >10% of people over 80.

The global population over 80 is projected to triple by 2050 — from 143M to 426M people.

Edwards doesn't need to grow market share.

The market is growing towards it.

Full $EW deep dive → https://t.co/kXogpeiAc9

[BioCompounding @BioCompounding]

In 1958, an engineer and surgeon's said: "Let's build an artificial heart valve." The medical community thought it was preposterous

First human implant: 1960. Patient survived

65 yrs later, that same focus has built one of the most defensible franchises

https://t.co/MmFTr2fr5l

[BioCompounding @BioCompounding]

Conclusion: $EW isn't "cheap" on a vanilla DCF. You just need real conviction in a specific combination of duration, margin, and risk-premium assumptions to own it here.

Full model + reverse DCF breakdown in the https://t.co/qUlMwaJewR

What's your read?

[BioCompounding @BioCompounding]

Built a full DCF on Edwards Lifesciences ($EW). Base case fair value: $52. Stock price: $91.60.

So, I reverse-engineered the model to find out what the market has to believe to justify $91.60. 🧵

Read the deep dive and find the model here: https://t.co/qUlMwaJewR

[BioCompounding @BioCompounding]

There's also an unpriced call option: Edwards' Heart Failure platform (still pre-revenue). Even generous assumptions there only add ~$0.15/share right now. Maybe it's too early to matter, but it's the kind of thing that rewrote TMTT's story a few years ago.