For Mirati Kras gives and it takes away

It took a major biotech market retrenchment to bring about, but the Kras bubble might have just burst. As a result Mirati was punished heavily, losing 12% of its value yesterday. The trigger for the selloff was this week’s earnings from Amgen, which contained a fourth-quarter Lumakras revenue number of $45m, about $15m short of some analysts’ estimates and up only 25% over the third quarter. Full-year sales of $90m missed Evaluate Pharma consensus estimates of $103m, and the implication is that the drug is already stalling, barely six months into its launch. While the miss could be down to Covid, the worrying aspect was Amgen nearly halving its estimate of addressable US second-line NSCLC patients with the Kras G12C mutation, from 13,000 to just 7,000. While the front-line opportunity is still thought to number 25,000, it seems that far fewer patients than previously thought are making it to the second line. This alarming inference meant that Mirati was unable to capitalise on an important lifeline Amgen has given it, and instead the focus falls on just how much analysts now need to slash from adagrasib’s forecasts (Amgen hold-up gives Mirati a vital lifeline, February 8, 2022).

Kras inhibitor sales forecasts before Amgen's Lumakras miss ($m)
    2021e 2022e 2023e 2024e 2025e 2026e
Lumakras
Amgen
103*
381
682
1,029
1,403
1,776
Adagrasib 
Mirati
0
60
258
645
1,127
1,676
Note: *actual 2021 figure was $90m. Source: Evaluate Pharma.

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