Craigakess, Creating valuations is tricky as no
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Posted On: 02/02/2020 8:11:48 AM
Re: craigakess #16619
Craigakess,
Creating valuations is tricky as normally one does not have all the required data at hand, and, even then, the valuation of any BioTech company depends greatly on the perceived potential of the company to produce a desired drug (there are many companies around with billons valuation and one drug in the pipeline in p2.)
However, one has to have an approximate valuation to make educated decisions. Many ways of doing this, each one with advantages and disadvantages (the more details on introduces the less “firm” inputs one gets, for example” how many doses are we going to sell per year??).
In any case, my model gives me a VERY CONSERVATIVE share price of $26.60 for HIV and Breast cancer indications.
I am assuming the following inputs: Sales HIV USA $1.7B for Combo, $6B for Mono, Rest of the world one half of this, real Income only 25% of sales. For Oncology income of 5% of $16.23 Billion (total breast cancer market USA 2018). Please note that this is only $811 Millions (Ibrance was $2.9 Billion) so, I am being extremely conservative. Rest of the world double of this.
The resultant market cap is $18.626 Billion using a 3.5 sales multiplier (some use 4 or 5) which diluted with 700 Million shares yields a SP of $26.6
I am not counting-in GvHD, NASH, Colon, Pancreatic, Melanoma, Liver, Lung, Stomach, PrEP and OFF-Label and the other possible indications.
Please be advised that this is an approximation, some of you might rightly dispute my numbers. I have made lots of assumptions mostly conservative, so the real number is likely to be higher, for example, if we sell the same as Pfizer's Ibrance the SP would be $36.7
Don't use these number to make your trading decisions, this is just imho.
Creating valuations is tricky as normally one does not have all the required data at hand, and, even then, the valuation of any BioTech company depends greatly on the perceived potential of the company to produce a desired drug (there are many companies around with billons valuation and one drug in the pipeline in p2.)
However, one has to have an approximate valuation to make educated decisions. Many ways of doing this, each one with advantages and disadvantages (the more details on introduces the less “firm” inputs one gets, for example” how many doses are we going to sell per year??).
In any case, my model gives me a VERY CONSERVATIVE share price of $26.60 for HIV and Breast cancer indications.
I am assuming the following inputs: Sales HIV USA $1.7B for Combo, $6B for Mono, Rest of the world one half of this, real Income only 25% of sales. For Oncology income of 5% of $16.23 Billion (total breast cancer market USA 2018). Please note that this is only $811 Millions (Ibrance was $2.9 Billion) so, I am being extremely conservative. Rest of the world double of this.
The resultant market cap is $18.626 Billion using a 3.5 sales multiplier (some use 4 or 5) which diluted with 700 Million shares yields a SP of $26.6
I am not counting-in GvHD, NASH, Colon, Pancreatic, Melanoma, Liver, Lung, Stomach, PrEP and OFF-Label and the other possible indications.
Please be advised that this is an approximation, some of you might rightly dispute my numbers. I have made lots of assumptions mostly conservative, so the real number is likely to be higher, for example, if we sell the same as Pfizer's Ibrance the SP would be $36.7
Don't use these number to make your trading decisions, this is just imho.
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