Replies to post #194391 on Innovation Pharmaceuticals Inc (IPIX)

[frrol]

The future FCF of Prurisol are very uncertain at this stage, but in NPV you give your best-guess projection and then adjust your WACC - the discount factor - to reflect that uncertainty. That's why at this stage, a simple projected sales multiple is generally used. Even projected sales at this stage is tricky to estimate, however, so the applied multiple would be relatively smaller to reflect that. You would then apply a ratio factor for the split between us and our prospective partner. That ratio factor needs to be reasonably estimated as well.