Biotech Values

[tinkershaw]

Value of MNTA if Teva approved

Just running some numbers. If Teva is approved, utilizing a 12% royalty rate on revenues, if the market is split 50/50 between the two companies (with 80% of the market going generic) using a 20% price discount to branded drug I get revenues to MNTA of: ~$67 million, which I consider to be a low side estimate.

On the top end, assuming the same as above but MNTA/NVS garner a 65% marketshare for their generic (again with the generic market being 80% of the total, with a 20% price discount to the branded drug) I calculate revenues to MNTA of ~$134 million.

On the bottom end this share price will not hold, on the top end, I think the present share price can be justified, even if Teva does gain approval as it would be ~7.46 x revenues, which would be justified given the rest of the company and its potential.

Has anyone else run these numbers? If so, what do you guys come up with on this scenario. We've run a lot of the best case scenarios, and those prices are multiples higher than present valaution. What about the downside if Teva gets approved? (I am discounting the lawsuit as mostly bunk so not incorporating that into the numbers).

Tinker