Sevabertinib is Bayer's next billion dollar asset
Below is a video breakdown on the valuation
How we built the model
This week I published a valuation for Sevabirtinib in HER2 positive metastatic non-small cell lung cancer (NSCLC), and based on the modeling I believe this will be a potentially multi-billion dollar asset.
Below is the Gantt chart that I built to help me arrive on my valuation and is the basis on how I do pharmaceutical product valuations.
A few points about the video:
I started in the order listed below because sevabirtinib has been approved in the 2nd line setting in November 2025 and is not directly connected to the other events.
The other events are all connected to each other. If the Phase 3 trial is successful the next steps are registration followed by revenue.
The existing halo indication is another event linked to a successful registration and will be explained further in the article.
The 2044 date is the date I anticipate that sevabertinib will have loss of exclusivity.
Sevabertinib Gantt chart (Source PharmaCalc)
Deeper dive into the individual components
Sevabertinib 2nd line HER2 positive revenue event:
Let’s start with the sevabertinib 2nd line HER2 positive revenue section and here are some key points in the video below.
High sensitivity and low sensitivity analysis was set at 0.3 which is PharmaCalc’s internal number although these numbers can be changed.
There are two ways to input revenue; either peak revenues or manual revenues:
For manual revenues Analytic Powertools has an internal excel product that lets me calculate annual revenue on a spreadsheet which is then be copied and pasted directly into PharmaCalc.
Based on inputs I calculated peak revenues to be about $1 billion dollars which can be seen in the video.
Sevabertinib 2nd line HER2 positive NSCLC revenue (Source PharmaCalc)
SOHO-02 Phase 3 trial HER2 positive event:
Let’s talk about the Phase 3 trial section. Here are some key points about the video below.
Duration of trial is based on clinicaltrials.gov.
Like everything else on PharmaCalc numbers will auto-populate according to internal benchmarks but can be changed.
Cost of the trial is updated automatically from our internal database based on published data.
Probability of the trial being successful also comes from our internal database and is determined by published data.
If trial is successful then I connected the green dot to the next event → the registration.
Sevabertinib Phase 3 Trial HER2 positive NSCLC (Source PharmaCalc)
Sevabertinib first line HER2 positive registration event:
The registration portion has a similar setup to the trial section. Here are some key points about the video below.
Most of the numbers have auto-populated but can be changed.
The current FDA has been more aggressive about getting impactful drugs to market faster so I anticipate it will not take very long for drug to be approved.
Like the other events the duration of these events can be adjusted easily.
Sevabertinib Registration HER2 Positive NSCLC (Source PharmaCalc)
Sevabertinib first line HER2 positive revenue event:
Let’s talk about the event that is the driver of the massive valuation of sevabertinib.
Here are some key points about the video below.
Like the other revenue event PharmaCalc auto populates numbers that can be adjusted.
Non-small cell lung cancer is the most commonly diagnosed malignancy worldwide and the vast majority of these patients are advanced at diagnosis.
HER2 mutated lung cancer represents 2-6% of lung cancers similar to ALK mutated lung cancer.
I anticipate a big company like Bayer will gain market share rapidly if trial is successful based on precedent set by other targeted treatments and I expect peak revenues to be around $3 billion dollars.
Sevabertinib 1st line revenue HER2 Positive NSCLC (Source PharmaCalc)
The existing halo indication
The halo is one of the events that can be inserted to account for market dynamics. In this video it should be noted that there will a 99% reduction in second line revenue if sevabertinib is approved in the first line setting.
Existing halo indication (Source PharmaCalc
Some additional figures
I created a tornado summary, a Monte-Carlo simulation and various charts in the video below.
Here are some key points about the video.
Tornado summary shows that highest degree of variability is sevarbertinib revenue in the first and line settings.
Having a successful phase 3 trial in the first line setting has significant variability as well.
The simulation tab shows a Monte-Carlo simulation with revenue projection across different probabilities.
Under the chart tab, there are several charts showing revenues across different variables.
Sevabertinib tornado summary, Monte-Carlo simulation & charts (Source PharmaCalc)
Final thoughts
Sevabertinib is expected to be a blockbuster asset for Bayer based on the valuation done by PharmaCalc. Our bullish valuation is based on the following variables:
We anticipate the phase 3 trial will be successful and and our confidence is based on the degree of success targeted treatment has seen across other indications.
Sevabertinib is already approved in the second line setting and should see rapid uptake by oncologists given the overall responses rates seen in SOHO-01 trial.