Biotech Values

[DewDiligence]

Re: RVNC’s valuation (updated)

…do you still think it’s significantly undervalued at current level?

RVNC is a solid buy for long-term investors, IMO. Based on the phase-3 results from the SAKURA-1 and SAKURA-2 studies reported in Dec 2015 (#msg-136643306, #msg-136644001), RVNC is almost assured to launch a best-in-class product in a fast-growing market within the next two years.

Moreover, the addressable market is truly global. As emerging middle classes in formerly poor countries gain more disposable income, one of the things they want to spend it on is looking good.

As I’m typing this (share price=$31.30), RVNC’s enterprise value on a fully-diluted basis is about $975M (see #msg-139013493 and #msg-139013481). I previously estimated that AGN’s Botox franchise (including aesthetic and therapeutic indications) had a net present value of $24B (#msg-127654469), so there is plainly a lot of headroom here.

At present, my opinion of the RVNC-MYL collaboration for a Botox biosimilar is neutral—i.e., on balance it neither enhances nor detracts from the underlying investment thesis described above.