Crinetics Pharmaceuticals (CRNX) has a problem. Their new drug Palsonify could either justify the $4.3 billion valuation or reveal it as dangerously overpriced. The FDA approved it on Sept. 25, which is nice. Now it’s a commercial company, whatever that means in biotech land where “commercial” often translates to “we hope.” The stock jumped 28% on the news. Wall Street loves a good fairy tale. But there are only 11,000 diagnosed patients in America, and the drug costs $290,000 a year. So it goes.
Let’s talk numbers. If Crinetics captures half the market – ambitious, sure – that’s 5,500 patients generating $800 million in net revenue after discounts. Goldman Sachs, ever the pessimist, values the company at 7 times its $600 million peak sales estimate. Others imagine $1.5 billion in sales and multiples closer to 3. The gap between these outcomes is vast. Investors could double their money or lose half. So it goes.
The value proposition
Palsonify is the first once-daily oral treatment for acromegaly. The phase 3 trials worked well enough. Biochemical control, symptom improvement – the usual jargon. Regulators cleared it, which is the first hurdle. The second hurdle is called “reality.” Analysts now predict peak sales topping $1 billion globally. Some whisper of carcinoid syndrome and international markets. Others warn about the limited patient pool and insurance companies saying no. They’re probably both right.
Palsonify arrives in U.S. pharmacies by October. Management says uptake will be slow. Formulary placements take time. Reimbursement negotiations drag. Revenue growth will creep upward, not skyrocket. So it goes.
The $290,000 question
At $290,000 annually, Palsonify costs more than a Lamborghini Huracán. For a drug, that’s normal. For a treatment that requires 30-40% discounts after rebates, net revenue per patient drops to $175,000-$200,000. Europe and Japan could add 20-50% to peak sales. Carcinoid syndrome is another shot at the jackpot. But each new market demands regulatory approvals, reimbursement deals, and sales teams. The $1.5 billion forecasts assume flawless execution. Nothing is flawless. So it goes.
Competition and other inconveniences
Palsonify isn’t the first pill for acromegaly. Chiesi’s Mycapssa got there first, though twice-daily dosing and absorption issues kept sales low. Physicians treating rare diseases are conservative. They stick with what works until forced to change. Injectable therapies remain dominant. Convenience doesn’t guarantee victory. So it goes.
Crinetics also burns cash developing CRN09682 for SST2-expressing tumors. Pipeline diversification is wise, but losses continue. Commercial success is needed now. Investors hate dilution. So it goes.
The biotech binary
FDA approval removed one risk. Others remain. Commercial-stage biotechs live and die by execution. Miss prescription targets? Shares drop 20%. Lose a pharmacy benefit manager? Another 15%. That’s the game. The reward is equally extreme. If Palsonify hits $1.2 billion in sales and investors assign 6-8 times revenue, the stock could double. Add pipeline progress and international expansion, and optimists sketch $90-$100 per share. Pessimists see disaster. So it goes.
Over the next six months, Palsonify will prove itself a blockbuster or a cautionary tale. Until then, the rest of us can only watch and wonder. ⚠️
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2025-09-28 15:40