What is the current valuation of Lumos Pharma’s Oratrope

The revenue for Oratrope is expected to reach an annual total of $88 mn by 2034 in the US based off GlobalData’s Expiry Model. The drug’s revenue forecasts along with estimated costs are used to measure the value of an investment opportunity in that drug, otherwise known as net present value (NPV). Applying the drug’s phase transition success rate to remaining R&D costs and likelihood of approval (LoA) to sales related costs provides a risk-adjusted NPV model (rNPV). The rNPV model is a more conservative valuation measure that accounts for the risk of a drug in clinical development failing to progress.

Oratrope Overview

Ibutamoren mesylate (MK-677) is under development for the treatment of pediatric growth hormone deficiency (PGHD), children born small for gestational age (SGA), idiopathic short stature, nonalcoholic fatty liver disease (NAFLD) and Prader Willi syndrome. It is administered orally. MK-0677 is a synthetic GHRS, ghrelin mimetic compound. MK-0677 is active growth hormone secretagogue that acts on the growth hormone secretagogue receptor in the anterior pituitary to stimulate the release of growth hormone. It was under development for the treatment of Alzheimer’s disease, fibromyalgia, sarcopenia in post-hip fracture patients, Turner syndrome and chronic renal failure in end-stage renal disease patients.

Lumos Pharma Overview

Lumos Pharma, formerly NewLink Genetics is a clinical-stage biopharmaceutical company that focuses on the development and commercialization of new therapies for the treatment of unmet medical needs of rare diseases. It’s lead investigating candidate, LUM-201 (ibutamoren) is an oral growth hormone stimulating therapy for the treatment of pediatric growth hormone deficiency (PGHD), turner syndrome, children born small for gestational age (SGA), and other rare endocrine disorders. Lumos Pharma is headquartered in Austin, Texas, the US.

The company reported revenues of (US Dollars) US$1.5 million for the fiscal year ended December 2022 (FY2022), compared to a revenue of US$0.2 million in FY2021. The operating loss of the company was US$32 million in FY2022, compared to an operating loss of US$31.4 million in FY2021. The net loss of the company was US$31.1 million in FY2022, compared to a net loss of US$30.4 million in FY2021.
The company reported revenues of US$0.5 million for the second quarter ended June 2023, a decrease of 23.7% over the previous quarter.

For a complete picture of Oratrope’s valuation, buy the drug’s risk-adjusted NPV model (rNPV) here.

GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article.

To create this model, GlobalData takes into account factors including patent law, known and projected regulatory approval processes, cash flows, drug margins and company expenses. Combining these data points with GlobalData’s world class analysis creates high value models that companies can use to help in evaluation processes for each drug or company.

The rNPV method integrates the probability of a drug reaching a clinical stage into the cash flow at that time, which provides a more accurate valuation, as it considers the probability that the drug never makes it through the clinical pathway to commercialization. GlobalData’s rNPV model uses proprietary likelihood of approval (LoA) and phase transition success rate (PTSR) data for the indication in the highest development stage, which can be found on GlobalData’s Pharmaceutical Intelligence Center.