Ariad Pharmaceuticals, Inc. (ARIA), Bristol-Myers Squibb Co (BMY): The Most Important Number for This Drug Launch

Early in a launch, I’d much rather see a drug double sales by doubling a prescriber base than by the same prescribers doubling their prescriptions because eventually those prescribers are going to run out of patients to prescribe to.

Competing with the big boys
Let’s face it, $14 million is still a relatively small sales figure. At that run rate, Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) is being valued at 62 times annual sales. 62!

To justify its valuation, Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) has to take sales away from some of the big boys. There’s certainly plenty to go around. Bristol-Myers Squibb Co (NYSE:BMY) sold $312 million worth of Sprycel worldwide in the second quarter, up 28% year over year. Novartis AG (ADR) (NYSE:NVS)’ Gleevec and Tasigna combined for $1.5 billion in sales. Gleevec is the big boy, but Tasigna is no slouch with sales of $315 million in the second quarter.

A launch in the EU will help Ariad Pharmaceuticals, Inc. (NASDAQ:ARIA) drive sales higher, but investors should be focused on the first-line indication. We’ll have to wait for data from the Epic trial, but I think doctors’ use of Iclusig as a second-line treatment — as opposed to third or fourth — is a good sign that they think highly of the drug and anecdotal evidence that the Epic trial has a high likelihood of succeeding.

The article The Most Important Number for This Drug Launch originally appeared on Fool.com is written by Brian Orelli.

Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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