Anti-cancer drug developer PharmaEngine Inc (智擎生技) is expected to swing back to the black this year with NT$1.71 billion (US$56.45 million) in net profit forecast after the first milestone payment for sales of its new pancreatic cancer drug in the US, SinoPac Securities Co (永豐金證券) said in a report on Thursday.
Based in Taipei, PharmaEngine will receive US$75 million in the advance payment from US-based Merrimack Pharmaceuticals Inc in the fourth quarter this year after securing a drug permit for MM-398 in the US, the brokerage said.
The payment would increase PharmaEngine’s revenue to NT$2.29 billion this year, up from NT$37 million last year, and its profit would also rise from estimated losses of NT$110 million a year ago, SinoPac said.
The drug is currently under phase-three clinical trials in the US, EU and Asia, and SinoPac forecast that the trials would yield positive results in April because of high survival rates of patients taking the drug.
SinoPac estimated that it would take less than eight months for the company to get approval from the US regulator after the trials are completed.
“Merrimack has also initiated investment projects to build manufacturing facilities of MM-398, indicating the company’s high confidence in securing the drug permit,” the bank said.
According to PharmaEngine, once the drug is approved in the US, Merrimack will apply for drug permits for MM-398 in Europe and Asia, except for Taiwan.
PharmaEngine will have the rights to sell the drug in Taiwan after receiving the drug permit from the government, the deal said.
Meanwhile, SinoPac said that Merrimack announced last month it has started phase-one clinical trials of MM386 for treating Ewing’s sarcoma, and the drug is likely to receive a drug permit in the US by the end of this year.
Based on the deal between PharmaEngine and Merrimack in 2011, PharmaEngine can receive royalties of 15 percent from Merrimack for sales of MM386 in Europe and Asia except Taiwan.
However, Merrimack does not need to pay royalties to PharmaEngine for future sales of the drug in the US.
Eyeing the potential of MM386 to treat multiple cancers, PharmaEngine estimated that potential sales of MM386 in Europe and Asia except Taiwan could reach US$500 million a year, PharmaEngine said.