Our valuation for Amarantus is $188 million in mar
Post# of 30028
Posted On: 04/13/2015 2:14:36 AM
Our valuation for Amarantus is $188 million in market value, or approximately $0.15 per share. We arrive at this
number by calculating a fair-value of $60 million for the entire Diagnostic division (AMDX) and $128 million for the
Therapeutics division.
For AMDX, we believe biomarker services (LymPro + Georgetown) are worth $50 million, or 5x our forecasted
peak sales number of $10 million in 2018 (assumes only IUO and CLIA). For MSPrecise, we assume a
valuation of only $10 million about what Amarantus paid for the asset in January 2015. At this point, we are
only comfortable saying it is worth what they paid, and are eagerly awaiting additional clinical validation data
and the CLIA filing later in the year to get a better sense of the commercial opportunity. As noted above, the
true accuracy of the standard of care for MS diagnosis, oligloclonal banding, has high interlaboratory variability,
so interest in the product may be high or low on a lab-by-lab basis.
For eltoprazine, we have built a detailed financial model forecasting sales in both PD-LID and ADHD, with a
22% discount rate (comparable to the recent Series-E financings) and various probabilities of success (25% for
LID, 10% for ADHD). Our NPV model pegs eltoprazine to be worth $70 million.
We have built a similar model for ESS using the same discount rate and a 20% probability of success. We are
assuming a rapid path to market for ESS and Orphan Drug pricing on the product. Our NPV analysis pegs the
value of ESS at $35 million.
We believe MANF, in all its preclinical glory, is worth $10 million. While we are intrigued by the various Orphan
applications and potential for the drug in massive indications like diabetes and myocardial infarction, the early- stage nature of the asset forces us to apply a significant probability adjustment to our models. At this point, we
are still likely twelve months from seeing the IND application cleared by the U.S. FDA, and although we believe
MANF is partnerable in 2017 based on Phase 1 data, we do not feel comfortable saying MANF is worth more
than $10 million given that the drug has yet to be tested on human subjects.
Despite what we believe is aggressive discounting and downward adjusting of our models based on overly
pessimistic probability assumptions, we are still arriving at a target NPV for the entire company of $188 million, or
240% above the current stock price. Even with 1.191 billion (fully diluted) shares outstanding, we still believe the
stock is worth much more than the $52 million value it is trading at today. Management clearly has work to do
before an uplist to the NASDAQ is even possible, but a positive return on $0.05 per share seems like a good
risk/reward for investors.
number by calculating a fair-value of $60 million for the entire Diagnostic division (AMDX) and $128 million for the
Therapeutics division.
For AMDX, we believe biomarker services (LymPro + Georgetown) are worth $50 million, or 5x our forecasted
peak sales number of $10 million in 2018 (assumes only IUO and CLIA). For MSPrecise, we assume a
valuation of only $10 million about what Amarantus paid for the asset in January 2015. At this point, we are
only comfortable saying it is worth what they paid, and are eagerly awaiting additional clinical validation data
and the CLIA filing later in the year to get a better sense of the commercial opportunity. As noted above, the
true accuracy of the standard of care for MS diagnosis, oligloclonal banding, has high interlaboratory variability,
so interest in the product may be high or low on a lab-by-lab basis.
For eltoprazine, we have built a detailed financial model forecasting sales in both PD-LID and ADHD, with a
22% discount rate (comparable to the recent Series-E financings) and various probabilities of success (25% for
LID, 10% for ADHD). Our NPV model pegs eltoprazine to be worth $70 million.
We have built a similar model for ESS using the same discount rate and a 20% probability of success. We are
assuming a rapid path to market for ESS and Orphan Drug pricing on the product. Our NPV analysis pegs the
value of ESS at $35 million.
We believe MANF, in all its preclinical glory, is worth $10 million. While we are intrigued by the various Orphan
applications and potential for the drug in massive indications like diabetes and myocardial infarction, the early- stage nature of the asset forces us to apply a significant probability adjustment to our models. At this point, we
are still likely twelve months from seeing the IND application cleared by the U.S. FDA, and although we believe
MANF is partnerable in 2017 based on Phase 1 data, we do not feel comfortable saying MANF is worth more
than $10 million given that the drug has yet to be tested on human subjects.
Despite what we believe is aggressive discounting and downward adjusting of our models based on overly
pessimistic probability assumptions, we are still arriving at a target NPV for the entire company of $188 million, or
240% above the current stock price. Even with 1.191 billion (fully diluted) shares outstanding, we still believe the
stock is worth much more than the $52 million value it is trading at today. Management clearly has work to do
before an uplist to the NASDAQ is even possible, but a positive return on $0.05 per share seems like a good
risk/reward for investors.
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