GTCb Analyst reports
I suppose it's of interest and OK to publicize some of the "research" contained in the recent analyst reports on GTCB.
SG Cowen published a report dated May 9 (when share price was $.94) updating their prior model based on the EMEA delay. The conclusion reads, in part:
With EU launch expected in the next 9-12 months and an EV of <$25 M, we believe GTC is positioned to outperform its peers should ATryn's launch be successful.
Of note, the analysis assumes only $70M in revenue in 2009, the year profitability is projected. That seems conservative to me, presumably based solely on ATryn sales in Europe. However, I think that US sales and additional royalty and milestone income from other protein projects could be factored into a reasonable model as likely.
In the somewhat more detailed May 16 Rodman and Renshaw report (when share price was $1.18), they give GTCB their "outperform/speculative risk" rating. Because of EMEA delay and expected 1 year delay in launch of ATryn, R&R revised its end of 2006 target downward to $4. The report does a nice job of outlining the completed European and planned US ATryn phase III trials. Based on valuation metrics, FWIW:
Using the market multiple of 6X, our 2013 ATryn revenue estimate of approximately $226 MM and a 35% annual discount rate that we believe adequately compensates investors for the risks associated with GTCB, we derive a YE06 price target of $4.
The Rodman and Renshaw does address the pipeline, both internal and possible low royalty from Merrimack, but apparently does not count on any of this in its valuation, so , again, it seems to be a conservative figure to me.
Notable in my mind, as I stated earlier, these revenue figures are nowhere close to the lofty potential revenues cited by the CEO, in the range of $500 million for ATryn alone, assuming approval for additional indications.
