I made some quick calculations to try to estimate Aradigm's market value.
Grifols will fully commercialize Linhaliq in exchange for between 12.5% and 20% of revenues, by country, with revenues divided by half if there's a competitor in that country. I expect Bayer to begin to become a competitor at least six months after Aradigm and potentially longer if it needs to do another trial, so I estimate 12% royalties. Given that the royalties from revenues are pure earnings, I assign a 12 P/E from the revenue stream. I assume a 15% discount rate, 2021 sales of $750m, and $20m more in milestone payments. I discount the rest of the pipeline to zero.
Given:
A 15% discount rate, 2021 sales of $750m, 12% royalties and a 12 P/E, a cumulative 40% dilution, and $20m more in milestone payments... ...then working backwards, Aradigm should be worth perhaps (at least) ~$420m now (the discount rate here factoring in all risk, including chances), which is 18.7 times the market cap as of 9/21/2017 of ~$22.67m...
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