Kitov Pharmaceuticals Hldgs L Sponsored ADR (KTOV)

[finesand]

Detailed Consensi Valuation Update 3

Mostly chapter 'Consensi Valuation' in our blog https://finesand.wordpress.com/2018/12/15/kitov-pharmaceuticals-ktov-the-last-mile-of-a-long-journey/

(Done by SeaOfSand, feinsand and with help from David)

US deal with Coeptis, 50% royalties on profits is the equivalent of 22.5% on gross sales, 53% above industry average of 14.7%.


Re-aligned Consensi sales price to 100% 50% and 25% of rebated Vimovo + Celebrex sales price,
considering $100M the minimum constraint sales to kick off Consensi (in the US). Thx David.

Therefor we settle for the US prices as follows: Maximum $4.1407/pill, the expected $3.2877/pill and floor $1.50/pill.

All per share numbers are based on fully diluted shares or ADS of 26.004M.

China sales price minimum is 33% of US price lately, but could be 50% or higher.

Note that we use a very low conservative market penetration of only 3%, we would expect 6-9% might be possible, leading to 2-3x of below valuations.

Expected Price of $3.2877/pill

This results to $14.97/sh for China & South-Korea and $29.58/sh for the US, $44.55/sh in total @ P/E 10 including a 10% discount. This Consensi valuation is 6x of Grunenthal’s Oct’18 acquisition of Vimovo EU rights (ex-US and ex-JP).


Floor Price of $3.2877/pill

This results to $6.83/sh for China & South-Korea and $13.50/sh for the US, $20.33/sh in total @ P/E 10 including a 10% discount. This Consensi valuation is 3x of Grunenthal’s Oct’18 acquisition of Vimovo EU rights (ex-US and ex-JP).


Further more, the model also shows that if Consensi would be sold at just the same price of discounted generics at $0.3719/pill, the US deal alone is worth $3.35/sh or $5.04/sh with CN+SK in total! (Case included in spreadsheet)

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In November 2017, Coeptis Pharmaceuticals signed a Multi-product Co-development Agreement with Ciron including manufacturing, with initial value of above $100M sales.
Hence they probably use them for Consensi CMC as well. Quite a well connected growing pharma biz.

multi-product agreement with Ciron Drugs & Pharmaceuticals Pvt. Ltd (Mumbai, India) under which Coeptis and Ciron expect to develop and commercialize several ANDAs. Under the terms of the agreement, Ciron will develop, manufacture, and supply the selected products exclusively to Coeptis for the U.S. market, and Coeptis will market and distribute the products under its label. The initial agreement includes a basket of products with annual U.S. brand sales of more than $100 Million USD, according to IMS Health data.

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.. and then, since ordinary shares are qualified to be bought by TA-Biomed index ETF and no further action or selection is required, see https://www.tase.co.il/en/market_data/index/167/about

The TA-Biomed Index is comprised of all shares classified under the Biomed sector, which meet the index criteria.

TA-Biomed is also recovering well from steep decline since Sep’18

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- Priced below Consensi Approval and NT219 Ownership
- Priced at FDA refuted Consensi data falsification allegations on July’17 $1.27/sh
- Consensi: SP $6.83 floor – $14.97 expected for China + Korea
- Consensi: SP $13.50 floor – $29.57 expected for US -> $20.33 – $44.55 total
- Consensi: Evaluating additional commercialization agreements in major markets worldwide (PR 2019-01-03).
- Changshan paid $1M (May’18) and will pay additional $2.5M for regulatory and up to $6M for commercial milestones
- Changshan in CFDA process, which is a formality lately, expected until May 2019.
- Changshan & Korea 12% Net Sales Royalties -> 9% Gross Sales Royalties.
- US Coeptis 40-60% Net Profit Royalties -> 22.50% Gross Sales Royalties.
- NT219: $30M or $1.15/sh minimum should be added here as well.
- 2018-11-13 Slides: NT219 Favorable FDA response pre-IND, IND in 2019 w/ partners (solid prelim interest in NT219)
- 2018-11-13 Slides: NT219 One more patent expected.
- 2018-06-19 HC Wainwright last Buy PT $12.50/ads
- 2018-06-01 Last offering 3.26M @ $2.50/ads
- FDA Exclusivity until 2021-05-31
- U.S. Patent 9,408,837: Filed 2011-02-14; Granted 2016-08-09; Term until 2031-02-14
- U.S. Patent 9,662,315: Filed 2015-11-10; Granted 2017-05-30; Term until 2035-11-10