Biotech Values

[DewDiligence]

Re: MNTA valuation

In the end I end up with the $110 million - $60 million (mnta's expenses), which gives me a net profit for momenta of $45 million [I think you meant $50M]. That's around $1 per share, which at a 15:1 pe looks about right.

A better way to look at this, IMO, is to imagine that MNTA were split into two companies where the first company owned the rights to the cash flow from Lovenox (plus the tax loss carryforward) and the second company owned all other MNTA assets.

Using your numbers ($50M annual cash flow from Lovenox valued at 15x), the imputed value of the first imaginary company is (15)$50M = $750M. To this figure you must add an imputed value for the second imaginary company, which owns the rights to Copaxone, M118, M402, all of MNTA’s IP, and the roughly $70M of cash on MNTA’s balance sheet.

Bottom line: Even using your own bearish numbers (in which NVS/MNTA attain just a 10-15% market share of Lovenox), it’s clear that the current valuation is not “about right.”