Catty, when trying to valuate an asset or a company there are a lot factors that go into assessing the value but the following is a sample of how it might get assessed. The important factors are potential peak sales, present division between partners of stake in Libigel (e.g., 50/50,40/60 split). These two will heavily impact the value. Therefore the following is purely speculative and makes many assumptions but is a simplification of how it might be valued.
In 2011 the presentation they were looking at a quick switch of 4 million prescriptions from physicians already prescribing off label and compounded testosterone. Assuming $500 /prescription (price will most likely be higher) that produces $2 billion in revenue out of the gates.
Using the same $500 drug price, they expected to grow this to $4.5 billion to treat HSDD once an FDA approved drug makes it to market.
The CV risk reduction sales most likely targeting patients with Hypertension and Dyslipidemia will most likely produce a much greater sales than the HSDD market. But for the sake of argument lets assume peak sales of $10 billion.
For an approved product, ANI could expect a deal in the vicinity of 2.5 X peak sales. However the drug is not approved and most likely will be taken the rest of the way by the partner. The trials were under and FDA SPA. Therefore they would have an increase chance of approval. However it is not a guarantee. Price will also depend on how they attribute the percentage of value between the two companies.
For the sake of argument let's assume that they agreed to a 50/50 assertion of value for work done.
$10 billion in peak sales X 50% = $5 billion X2.5 =$12 Billion
Therefore ANI may base the value for their share of the drug at $12 billion for an approved drug. However it is not approved though it has been greatly de-risked and may be looking at a 30% discount. (Note:They could still get market exclusivity for 5 years and do have the TRT patents to 2031). The discount could be more or less given the level of risk of not getting approved.
Therefore $12 Billion- 30% = $8.75 billion /approx 14 million shares once the Sr notes are coverted. PPS could be in the $625 range.
Personally, I believe global sales will eventually surpass $10 billion. If they peak sales are projected to compete with Humira Peak sales in
the PPS in a deal would be closer to $1125.
