Viropro, Inc. (VPRO)

[mroc237]

ANALYST PRICE TARGET AND VALUATION

No risk of FDA approval (see newswire below), a BINDING letter of intent, licensing payments for the next 36 months before royalties AND 50-50 royalty payments on a drug which had $5.6 BILLION in sales in 2009. This all sounds like a company whose market cap should far exceed 24 million, which is what VPRO's market cap is at current prices

VERY CONSERVATIVE Evalutation
Assumptions:
1)Entry of generics will lower market prices 20%
2)Assumptions: VPRO drug gets 10% of market
3)Industry standard for value is 2x revenues/share (although for biotechs this is can be often much higher)
4) O/S Quote:320MM (185MM owned by Intas)
100MM tradeable, other under escrow* (see sources below)
5) 50-50 profit sharing with SPPI (Currently, it is common for biotech companies and their pharmaceutical partners to enter into 50:50 profit sharing arrangements, representing at least a 3-fold increase in the industry’s pricing power.) **

Market Size:
5,600,000,000*.8 (disocunt for generics entry) = $4,480,000,000
VPRO/SPPI Share:
$4,480,000,000 * 10% = $448,000,000 annual sales
Split 50/50 with SPPI:
$448,000,000 * 50% = $224,000,000 VPRO annual revenues in 2015)
Discounting back 4 years at 10% interest (absurdly high estimate)
=224,000,000/ (1.1^4) = $152,995,014
So basically starting in 2015 we can conservatively say that from this deal ALONE VPRO will be generating about $153 MILLION in ANNUAL revenues in PRESENT VALUE DOLLARS

Now, even excluding ALL other deals (the company is involved in at least 2 more revenue producing ventures and has another cancer drug in developement) let's calculate a current PPS

$153 million /320 million outstanding shares = $.478 in revenue per share
Then industry avg revenue multiple of 2, though again it is often much, much higher

Gives us: $.95625 Price Per share current valuation

Currently trades at: .0732, offering a 13x return easy

And that again is EXTREMELY conservative, all my assumptions were "worst case scenario" from discount rate to total market size AND it ignores all VPRO's other projects. Meanining that this should easily be about $1 and probably more...

IF YOU LIKE THIS POST PLEASE ASK FOR IT TO BE STICKIED

Below is the original news report and other sources used for the valuation calculations


"DOW JONES NEWSWIRES

Spectrum Pharmaceuticals Inc. (SPPI) signed a deal with Viropro Inc. (VPRO) to develop a biosimilar version of Swiss pharmaceutical giant Roche Holding AG's (RHHBY, ROG.VX) cancer drug rituximab ahead of its U.S. patent expiration in 2015.

The agreement comes as many patent expirations loom over large pharmaceutical companies. Rituximab, used in the treatment of many lymphomas, leukemias, transplant rejection and some autoimmune disorders, saw worldwide sales of about $5.6 billion in 2009.

Financial terms weren't disclosed.

Viropro, a biotech drug maker, said Spectrum will license the rights to certain technology and it should get milestone payments over 36 months and royalty payments from ensuing sales.

Biosimilar drugs are officially approved versions of biopharmaceutical products made by a different company as patent and exclusivity expire on the product. "

* http://investorshub.advfn.com/boards/read_msg.aspx?message_id=58563906


**http://investorshub.advfn.com/boards/read_msg.aspx?message_id=58564974

this post above the (**) one is quoting the 10k