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Posted On: 06/29/2018 4:25:26 PM
Post# of 72446
Attached is the Aspire deal link.
https://www.sec.gov/Archives/edgar/data/13552..._424b5.htm
IPIX outstanding shares as of 5/6/18 was 155M. After yesterday’s deal it is 176.2M + 41.4M exercisable options + 4.1M preferred shares to Leo for loan= 221.7M shares worst case scenario. This number assumes $5M in milestones has shares sold at 38 cents vs reality of whatever the 5 previous days average is prior to a milestone achievement. Each of these 3 milestones will jack up the share price especially a BP partnership deal.
221M shares is a small number compared to the market opportunity with 3 platform drugs. Once a BP deal is in place IPIX will no longer need Aspire and will no longer have to dilute further. For example let’s say B-OM is a $1B/yr drug and BP signs an agreement for $50M upfront with 15% royalties. Let’s also assume that once IPIX has ample cash that they double their development efforts and double their burn rate from around $1M/month or $12M/yr to 24M/yr. 15% royalty on a 1B market is $150M revenue per year less 24M expense = $126M net earnings/yr. Assign a meager 15x PE earnings value and the company is worth $8.55/shr. on a single indication. That is on one indication with no consideration for the rest of the B platform, P or K. The above example is ultra conservative as if you look at most biotech stocks and check out the PE ratio it is NA so a 30+ PE is more realistic. Now consider a successful P2b trial and a 2B+ market = $300M/yr or $17.10/shr on its own or along with B-OM it is $300/yr +150M/yr =$450M a year less $24M= $426/M revenue x 15 multiple / 221.7M outstanding = $28.82/shr. Add $10-$20/shr for each additional B indication for UP, ABSSI, dermatology. Add a minimum of $50/shr if K gets to market. I think most longs will argue my examples error considerably on the conservative side but plug in your own numbers and as a true long on this board told me “Whoever sells IPIX last wins”.
https://www.sec.gov/Archives/edgar/data/13552..._424b5.htm
IPIX outstanding shares as of 5/6/18 was 155M. After yesterday’s deal it is 176.2M + 41.4M exercisable options + 4.1M preferred shares to Leo for loan= 221.7M shares worst case scenario. This number assumes $5M in milestones has shares sold at 38 cents vs reality of whatever the 5 previous days average is prior to a milestone achievement. Each of these 3 milestones will jack up the share price especially a BP partnership deal.
221M shares is a small number compared to the market opportunity with 3 platform drugs. Once a BP deal is in place IPIX will no longer need Aspire and will no longer have to dilute further. For example let’s say B-OM is a $1B/yr drug and BP signs an agreement for $50M upfront with 15% royalties. Let’s also assume that once IPIX has ample cash that they double their development efforts and double their burn rate from around $1M/month or $12M/yr to 24M/yr. 15% royalty on a 1B market is $150M revenue per year less 24M expense = $126M net earnings/yr. Assign a meager 15x PE earnings value and the company is worth $8.55/shr. on a single indication. That is on one indication with no consideration for the rest of the B platform, P or K. The above example is ultra conservative as if you look at most biotech stocks and check out the PE ratio it is NA so a 30+ PE is more realistic. Now consider a successful P2b trial and a 2B+ market = $300M/yr or $17.10/shr on its own or along with B-OM it is $300/yr +150M/yr =$450M a year less $24M= $426/M revenue x 15 multiple / 221.7M outstanding = $28.82/shr. Add $10-$20/shr for each additional B indication for UP, ABSSI, dermatology. Add a minimum of $50/shr if K gets to market. I think most longs will argue my examples error considerably on the conservative side but plug in your own numbers and as a true long on this board told me “Whoever sells IPIX last wins”.
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