Adam May@A_May_MD
Awesome - Some $ORKA takes to engage with! Let's have at it.
1) The KNOCKOUT study of Skyrizi showed a *higher* PASI100 response rate than what $ORKA did today. So what did we learn that is new about ORKA that would justify it going up? It didn't beat similar dosing of the on-market competitor - it actually came in lower. That's bullish? What's to stop $ABBV from running a quick label expansion study if this is such a big opportunity?
Oh, and what about ABBV's next generation IL23 that is already in studies, ABBV-547? Will $ORKA be glad to compete against that? What if they are both coming to market at the same time? Is $ORKA's value halved because of that? This is a hazard of developing a drug against a target that EVERYONE has known about for over a decade. Everyone else can do it.
2) Convenience? $ORKA offers 1 or 2 injections a year versus 4 with skyrizi. This is absolutely *nothing* against an entrenched competitor that will also go generic shortly after $ORKA's launch (assuming they do launch this). These drugs cost >$50,000/year. It would be highly irresponsible of doctors to prescribe this drug at that expense just for 2 or 3 fewer shots per year. Financial malpractice.
The VAST majority of patients are controllable by the existing options (cosentyx, taltz, skyrizi, tremfya, bimzelx, icotyde). 4 out of those 6 drugs will be biosimilar right around the time of the $ORKA launch. If patients have to step through even 2 of those drugs (as they ASBOLUTELY SHOULD), 95%+ of the market will be eliminated immediately.
Convenience of a fewer shots per year at the expense of hundreds of thousands of dollars of treatments per patient...absolutely RIDICULOUS. Supporting this type of medical expenditure when it isn't necessary is borderline immoral.
3) How would ABBV pushing a higher dose of their own drug cannibalize their own drug? This just literally does not make any sense at all. But besides the fact that literally just doesn't even make basic sense...again, ABBV already has their *own* next gen IL23 mAb with higher potency and a longer half life just like $ORKA...are you factoring that competitor in too? I doubt it.
4) ORKA-002 has all the same problems as 001. If there is no need for the drug, then there is no need. It doesn't matter if the new, unnecessary drug targets IL23 or IL17. We will have MULTIPLE generic versions of BOTH.
You cited the risk to your thesis being that the PASI100 is not differentiated. Well it was lower than KNOCKOUT with skyrizi and roughly the same as Bimzelx (again, already on the market for years). So again, why should the stock be up? What bar did it hurdle?
You also cite Skyrizi as a $17.5B franchise...This is wrong for $ORKA.
Actually only about $10B of Skyrizi sales right now are in psoriasis. $ORKA is specifically prevented from using their drug in other diseases like UC/Crohn's which make up a huge chunk of the Skyrizi revenues. So your TAM shrinks yet again, by almost half!
Now let's look at Bimzelx as a market comp. Bimzelx actually brought a *new* MoA to the market (IL17A/F) and accomplished the highest PASI100 rate ever seen at the time (roughly the same in P3 as what $ORKA just showed in a small P2a today). So, it actually offered something both new and better than what the market had when Bimzelx enterred.. In 2025 it did $2.2B in sales, but only ~half of that was in psoriasis (vs its other large indication of HS).
Consensus peak sales estimates for Bimzelx are around $6B, including HS and Pso. Let's halve it to get Pso peak sales ~$3B.
$3B in peak sales for a new MoA drug with better efficacy than anything else on the market at the time that entered against ZERO biosimilar competition from Cosentyx, Taltz, Skyrizi, or Tremfya, and entered the market in 2023, likely 7+ years BEFORE $ORKA will have a chance to get to market. And since then, another supposed megablockbuster drug has also launched into the psoriasis market with Icotyde. Just how many megablockbusters can this market handle???
So, with all of those massive tailwinds for Bimzelx, it can only muster ~$3B in peak Pso sales? What is $ORKA going to do with a me-four MoA going against a stacked roster of biosimilar and 2 megablockbuster branded drugs 7 years later? Isn't even $3B peak sales *far* too generous by this comp? Is $2B too generous?
Well at $80/share right now $ORKA's fd market cap is ~5.4B (that's using the share count directly from their own deck). That does not include significant dilution they will need to encounter to get through P3 studies. But let's be overly generous and totally ignore the dilution needs AND graciously assume $2B peak sales.
With P2a data in hand, this would be trading at >2.5x peak sales? With P2a data??? And again, I do not even believe the narrative that this gets $2B peak sales against 4 generic blockbusters, 2 branded blockbusters, and whatever other next-gen IL23 the likes of ABBV and JNJ will bring to the market over time.
In reality you are more likely looking at $1B peak, plus further dilution making the current price more like ~$7B. That would be 7x peak sales, at a P2a stage...(again, these are *my* numbers). That's more than they'd get for late phase M&A premium already.
By any rational metric this stock looks hideously overvalued. You have to simply believe that the American medical system and the docs who work in it are willing to totally ignore billions of dollars in healthcare expenses just so some people can have 2-3 fewer near pain free injections per year...Ridiculous. As someone who is sick of dealing with prior auth BS all the time (like all doctors/healthcare teams are), I'm telling you we are going to prescribe this biosimilars like hotcakes.
And that's the way it SHOULD be. That is how the system is SUPPOSED to work. There should not be massive financial rewards for copy/pasting decade old medical science into new drugs with *minute* points of differentiation. We should be seeking to reward innovation, not junk like this. If the argument is that the drug should be developed to serve the perhaps 1% of the psoriasis TAM that we can't get under control with all available options that we have right now, then yeah, sure, let's help those patients. But let's also be realistic about what that TAM is. Small. Fair valuations should reflect that.
