I reread the following great post by Mo and it inspired me to add what I could because as we all know news could come at any moment. Go IPIX!!!
Posted On: 04/10/2019 10:53:44 AM
Posted By: Mo
Yesterday’s shareholder alert stated that the annual revenue for B-OM is projected to be between $600M-$1.2B. IMO the purpose of that alert was to remind us of the tremendous value that B-OM alone will produce for IPIX shareholders. Let’s do some simple math. First off there have been some ridiculous share price projections on this board including one Quack that used a PE ratio of 5 for a biotech. The average PE ratio for the biotech sector is 145. The reason for that number being so high is that if you look at most biotech stocks you will see a N/A next to their PE ratio as most of them do not have net earnings, even if they have revenue coming in. Here is a sample list of biotech companies that I follow: SRPT, BTX, PTCT, SGMO, GALT, ICPT, NNVC, IONS. 7 of these 8 examples do not have net earnings therefore their PE is N/A. SRPT and ICPT’s share price are at $126 and $121 even though neither company have net earnings. Only IONS which also happens to be a royalty based biotech has a PE of 41 which is much lower than the biotech sector average PE of 145. These 8 companies have market caps ranging from $20M to $11.6B. The largest 5 of these 8 have an average market cap of over $5B.
Let’s plug in the B-OM revenue projections with some very conservative assumptions. IPIX has had annual expenses running around $12M/yr and recently stated they were projecting $13.5M in the next 12 months. Let’s jack that number up by 50% to $20M/year just to be ultra conservative. Most would agree that a 15% royalty is a good projection but let’s slash that down by 20% to be ultra conservative and use a 12% royalty fee from our soon to be announced partner. The minute a partnership deal is signed it will mark the end of any dilution but again to be ultra conservative lets jack up outstanding shares 20% to 220M. Now for the 4th grade math using these ultra conservative assumptions.
Total revenue from just B-OM = $72M-$144M ($600m-$1.2B x 12% royalty)
Annual IPIX Earnings using only revenue from B-OM = $52M-$124M (deducting $20M/yr expenses)
Earnings per Share = .236 to .472 ($52M-$124M / 220M shares)
IPIX stock price using royalty based IONS PE of 41 = $9.67- $19.35
IPIX stock price using biotech average PE of 145 = $34.22 - $68.45
So using extremely conservative assumptions on expenses and dilution and using the low end revenue projection of the single Brilacidin indication of B-OM and using a royalty PE ratio that is 70% less than the biotech average we come up with a $9.67 stock price. Again this $9.67 does not factor in $50+M cash from an upfront pharma deal or future revenue from other B indications including B-IBD and dermatitis. Oh and there is that life-saving cancer drug Kevetrin that will be a multi-billion dollar drug if it makes it to market. There will be great wealth creation for some on this board. Others on this board will move on to another stock that they know nothing about and get paid their 20 cents per post. Shorts will get crushed. Do the math.
Posted On: 04/10/2019 10:53:44 AM
Posted By: Mo
Yesterday’s shareholder alert stated that the annual revenue for B-OM is projected to be between $600M-$1.2B. IMO the purpose of that alert was to remind us of the tremendous value that B-OM alone will produce for IPIX shareholders. Let’s do some simple math. First off there have been some ridiculous share price projections on this board including one Quack that used a PE ratio of 5 for a biotech. The average PE ratio for the biotech sector is 145. The reason for that number being so high is that if you look at most biotech stocks you will see a N/A next to their PE ratio as most of them do not have net earnings, even if they have revenue coming in. Here is a sample list of biotech companies that I follow: SRPT, BTX, PTCT, SGMO, GALT, ICPT, NNVC, IONS. 7 of these 8 examples do not have net earnings therefore their PE is N/A. SRPT and ICPT’s share price are at $126 and $121 even though neither company have net earnings. Only IONS which also happens to be a royalty based biotech has a PE of 41 which is much lower than the biotech sector average PE of 145. These 8 companies have market caps ranging from $20M to $11.6B. The largest 5 of these 8 have an average market cap of over $5B.
Let’s plug in the B-OM revenue projections with some very conservative assumptions. IPIX has had annual expenses running around $12M/yr and recently stated they were projecting $13.5M in the next 12 months. Let’s jack that number up by 50% to $20M/year just to be ultra conservative. Most would agree that a 15% royalty is a good projection but let’s slash that down by 20% to be ultra conservative and use a 12% royalty fee from our soon to be announced partner. The minute a partnership deal is signed it will mark the end of any dilution but again to be ultra conservative lets jack up outstanding shares 20% to 220M. Now for the 4th grade math using these ultra conservative assumptions.
Total revenue from just B-OM = $72M-$144M ($600m-$1.2B x 12% royalty)
Annual IPIX Earnings using only revenue from B-OM = $52M-$124M (deducting $20M/yr expenses)
Earnings per Share = .236 to .472 ($52M-$124M / 220M shares)
IPIX stock price using royalty based IONS PE of 41 = $9.67- $19.35
IPIX stock price using biotech average PE of 145 = $34.22 - $68.45
So using extremely conservative assumptions on expenses and dilution and using the low end revenue projection of the single Brilacidin indication of B-OM and using a royalty PE ratio that is 70% less than the biotech average we come up with a $9.67 stock price. Again this $9.67 does not factor in $50+M cash from an upfront pharma deal or future revenue from other B indications including B-IBD and dermatitis. Oh and there is that life-saving cancer drug Kevetrin that will be a multi-billion dollar drug if it makes it to market. There will be great wealth creation for some on this board. Others on this board will move on to another stock that they know nothing about and get paid their 20 cents per post. Shorts will get crushed. Do the math.
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