An attempt to put a value on Clinuvel
ValueFox and other posters have previously posted very level headed valuations and mine is
merely and attempt to add to the discussion. I believe in my numbers and my assumptions but
they are as such only an educated guesstimate.
Shares out: App. 47.725 m
EPP:
Prevalence is said to be 1:75.000 to 1:200.000.
Many patients are know by the specialized porphyria centers in Europe and the US but due to general unawareness of the conditions many patients are believed to be undiagnosed. Roll out of Scenesse will most likely change that.
Europe: App. 4500 patients.
I will use a price per implant of $17.000 USD and an average of 3 implants per patients.
That's $51.000 per patient or $229.500.000 in revenues for 4500 patients.
Put aside 25 % for expences, taxes etc. (conservative) and Clinuvel is left with $172.125.000.
That's $3.66 EPS. Apply a ratio of your liking - I'll go with 20 - and the pps would reach $73 USD for EPP in Europe.
Add US FDA approval wich I consider a shoe in, and Clinuvel should be able to add 50 % to that number resulting
in a pps on the sunny side of $100.
In my guesstimate, 100 EPP patients are worth $1.6.
Now, roll out is extremely slow but I believe it will catch on and that Clinuvel will reach
1000 patients in Europe fairly quickly and maybe already 2H 2017. That should result in a fair price of $16 pps.
With possible roll out in the US next fall and a much quicker roll out here, 1500 patients is not unrealistic
by EOY 2017. That's $24 pps in 12 months or app. 200 % upside from where we are today.
Again, roll out can continue at a glacial pace or it could suddenly catch on. I hope the latter will be the case.
These numbers are ONLY for EPP, which is not a fair valuation. Vitiligo, other indications and label extensions
should also be part of the valuation.
VITILIGO:
Prevalence is app. 50 m. world wide. Let's assume that the price per implant drops significantly when such a broad patient population will have access. But even with a very low price per implant of let's say $500 and 5-10 required implants in the combination therapy that's $2500 – 5000 per patient.
With app. 3.200.000 Vitiligo sufferers in the US let's say that 5 % will be treated with Scenesse.
That's 160.000 patients yearly and between $400 – 800 m. Clinuvel will most likely require a partner to perform the last Phase III trail and to bring Scenesse to market to treat Vitiligo, so let's assume that Clinuvel can keep 40 % (on top of up fronts and milestones that I leave out just to be conservative.)
That's $67-134 pps for Vitiligo after full roll out. At this stage and with considerably uncertainty I think it's reasonable to ascribe a 10 % probability of success. These assumptions should result in a value off $6.7-13.4 pps for Vitiligo risk weighed. Today, the market doesn't ascribe any to Vitiligo at all which I think will change as soon as a partner is brought on board.
With 1000 patients and a 10 % risk weighed valuation on Vitiligo I think Clinuvel is worth $23 pps.
Add label extensions, Scenesse Enfance and new indications and the price could go much higher.
There is always risk, and biotech is notoriously the most risky investment out there. I do believe, though,
that Clinuvel is extremely de-risked and that the potential up-side is greater than the potential risks.
I see a pps. between $10-20 in 2017 and I won't begin selling any of my shares until we reach $40 which I
think will take a few years. Is $100 possible down the road ? I think so.
