Biotech Values

[WorstLuck]

Basic points:

Remove all value from non-partnered assets. While they may have value there is no guarantee the value will be positive.

Assume the full tax rate (there is some potential room for upside here on rate, but NOL appears to be used up or nearly used up).

A blended royalty rate roughly equivalent to 4.5% of DAA sales. Sales of 3.0B seem conservative enough on most pricing strategy that ABBV might employ and are within street values. Results are around 85M per annum after tax.

Use a 6x multiple accepting long tail but allowing for other competitive entrants to take share, including other entries by GILD and/or ABBV/ENTA.

Accept $100 million additional valuation for Japan, although I have done no work on those numbers. Any other odd amounts not included are included with this number.

About 300M combined for milestones and cash. Add in a couple bucks/share for 493.

It could still be more conservative yet, but the market seems to expect at least this much. I had been looking for low 50's EOY 2014 from a year ago and investing accordingly. Since then the value has dropped slightly.