Yesterday a post at the Bronte Capital blog pointed out that odious, hyper-promotional, Galena Biopharma (GALE) has a Direct-To-Consumer program that offers a free month of their super-fast-acting fentanyl, which they sell under the brand name Abstral.
Fentanyl is a synthetic opiate drug that is 100 times stronger than morphine and 20 times stronger than diacetylmorphine. What’s diacetylmorphine, you ask?
Yes, they are giving away a month’s supply of a drug 20x stronger than heroin. More than enough to addict their customers.
Obviously, this is a tried and true marketing strategy for opiates. On the street.
One might wonder why Galena would be doing such a thing, especially, given the claims of the rabid GALE longs that Abstral is some sort of wonder drug, when in fact it is just one of many forms of a common, albeit dangerous, generic drug.
Well, let’s find out.
Abstral was introduced to the US market around February 2011.
Abstral is the rather flat blue line on this chart:
By early 2013 two things are obvious. The first is that Abstral is hardly a success. The second is that the entire Fentanyl market (the dashed line on the chart) is shrinking. For calendar year 2012 Abstral sales were only 6/10s of 1% of the total, declining, market.
With a dud on their hands, the owners of Abstral looked to sell the US rights. And they found a buyer of their moribund product in Galena which acquired the US rights to the drug in March 2013, for $10mm in cash, a $5mm IOU, and royalty payments.
Now the bulls will say, the past is the past, and GALE management is so super-duper-amazing that they can turn a sow’s ear into a silk purse. So, lets look at Abstral sales in 2013.
The light green line is Abstral retail sales in $ .
Abstral sales are pathetic when compared to the leading branded product, Fentora, and equally absymal on a total dollars basis when compared against the generic, which is far cheaper.
But in pharma sometimes total dollars are not the whole story. Bulls love to talk about “scrips” and “scrip growth”. Lets compare Abstral against the competition in terms of prescriptions:
Again, Abstral, in light green, is a miserable failure.
Oh, but wait, the GALE longs will cry out, what about the increase in scrips in mid December 2013?
True, Abstral scrips did pick up right before Christmas, but just the rise in generic prescriptions alone (192) in mid Dec was greater than Abstral’s total scrips for the same period (188). Plus, the rise that week is a purely seasonal artifact. It happens every year around the holidays.
Galena management cannot seem to even give away a massively powerful and addictive drug with any level of success. They would not last long working for Avon Barksdale, Stringer Bell, or Marlo Stansfield, but they do have one metric that has been going up and to the right.
They sure seem to have been able to print stock.
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Birds of a feather….