aidenb, Valuating the company for sale is a tri
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Posted On: 09/16/2019 12:01:21 PM
aidenb,
Valuating the company for sale is a tricky business as we are talking here a lot of indications. So, what is being sold ?? the “whole enchilada”?, Only HIV ? , parts of Oncology indications ?.
As I mentioned before, I would prefer the company to finalize HIV and then go into oncology slowly and surely. At some stage it will be a target for a BO (almost certainly) as the enormity of the potential will be evident.
But, just for fun, let’s try to evaluate the SP in basis of what we have I hand: combination Therapy. This is not easy as several assumptions have to be made, however, if we accept that we will receive 50% royalties on sales, the task facilitates considerably as we know what the income will be (and therefore very approximate earnings).
Using the company’s $35K cost per patient we have:
Patients Stock Price
10000 $0.74
15000 $1.34
20000 $1.94
25000 $2.55
30000 $3.15
35000 $3.76
40000 $4.36
45000 $4.97
50000 $5.57
55000 $6.18
My assumptions are:
1) 50% royalties paid to CYDY (according to NP)
2) CYD pays 12.5% out of these (Progenics & AbbView)
3) Using a 30% discount for valuation (risk-adjusted Net present value rNPV)
4) Using operating expenses of $60M (from May’s CYDY 10-K + 5M, to calculate Net Income)
5) Using a P/E of 15 (low for biotech but assuming CYDY is a “mature” company for Leronlimab)
6) Using a total of (rounded) 570M shares (376756444 stock plus 178591849 of Options + Warrants plus 7413000 Convertibles Preferred plus 7238707 “others”).
Example for 30K patients in blue: ((30K*$35000)*50%*(1-0.125)-$60M)*0.3*15/570000000 = $3.15
For those that don’t like (or care) about valuation equations the SP can be calculated simply by:
Stock Price in $ = 0.12089 X Number of Patients (in thousands) - $0.4737
These prices are obviously depending on the assumptions made and can vary significantly, however, the point here is that the current SP is very undervalued. This is only for combination HIV indication.
Should other indication (Mono, PrEP, mTNBC, GvHD, Colon Cancer, NASH) succeed the above SPs are just a mere baseline.
GLTYA
Valuating the company for sale is a tricky business as we are talking here a lot of indications. So, what is being sold ?? the “whole enchilada”?, Only HIV ? , parts of Oncology indications ?.
As I mentioned before, I would prefer the company to finalize HIV and then go into oncology slowly and surely. At some stage it will be a target for a BO (almost certainly) as the enormity of the potential will be evident.
But, just for fun, let’s try to evaluate the SP in basis of what we have I hand: combination Therapy. This is not easy as several assumptions have to be made, however, if we accept that we will receive 50% royalties on sales, the task facilitates considerably as we know what the income will be (and therefore very approximate earnings).
Using the company’s $35K cost per patient we have:
Patients Stock Price
10000 $0.74
15000 $1.34
20000 $1.94
25000 $2.55
30000 $3.15
35000 $3.76
40000 $4.36
45000 $4.97
50000 $5.57
55000 $6.18
My assumptions are:
1) 50% royalties paid to CYDY (according to NP)
2) CYD pays 12.5% out of these (Progenics & AbbView)
3) Using a 30% discount for valuation (risk-adjusted Net present value rNPV)
4) Using operating expenses of $60M (from May’s CYDY 10-K + 5M, to calculate Net Income)
5) Using a P/E of 15 (low for biotech but assuming CYDY is a “mature” company for Leronlimab)
6) Using a total of (rounded) 570M shares (376756444 stock plus 178591849 of Options + Warrants plus 7413000 Convertibles Preferred plus 7238707 “others”).
Example for 30K patients in blue: ((30K*$35000)*50%*(1-0.125)-$60M)*0.3*15/570000000 = $3.15
For those that don’t like (or care) about valuation equations the SP can be calculated simply by:
Stock Price in $ = 0.12089 X Number of Patients (in thousands) - $0.4737
These prices are obviously depending on the assumptions made and can vary significantly, however, the point here is that the current SP is very undervalued. This is only for combination HIV indication.
Should other indication (Mono, PrEP, mTNBC, GvHD, Colon Cancer, NASH) succeed the above SPs are just a mere baseline.
GLTYA
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