Innovation Pharmaceuticals Inc (IPIX)

[macnqueso]

Fun w/numbers valuation of K - part 2

So what if K succeeds... what kind of valuation might we anticipate...

In part 2 I will start small... In part 3 I'll ramp it up a bit...

Let's begin with the lung cancer market in the U.S.... suppose K was approved for tx in this one indication and only in the U.S.... lung cancer tx in U.S. is 10 billion +... about 70% of all lung cancers involve mutation of P53... I posted a source for this information about a week ago... I like using round numbers so let's go with 7 billion as the gross market for K for lung cancer in the U.S....

Since we are playing with numbers let's run two scenarios... the first assuming K captures 10% of market share, the second 15% of market share... including both stand alone and adjuvant possibilities... I don't really know what K's market share might be for this indication... others might be able to help us here... I am just playing with numbers...

10% scenario -

700 million in gross rev
40% profit margin = 280 million
less 50 million in operating expenses = 230 million
P/E ratio of 20 = 4.6 billion market cap
150 million fully diluted = pps of $30.67

15% scenario -

1 billion in gross rev
40% profit margin = 400 million
less 50 million in operating expenses = 350 million
P/E ratio of 20 = 70 billion market cap
150 million fully diluted = pps of $46.76

What is K worth? This math suggests that K targeting only one indication in the U.S. could be worth 30 to 50 dollars per share... of course we know the goal is not to target a single cancer indication just in the U.S... as always... jmo...