Replies to post #215665 on Biotech Values

[DewDiligence]

Re: RVNC valuation

RVNC…was on my list to buy today, but my timing couldn’t be worse. …given results and your previous bullishness, do you still think [it’s] significantly undervalued at current level?

I think RVNC is still a solid buy for the long-term; they are now almost assured to launch a best-in-class product in a fast-growing market in the next two years or so.

As I’m typing, RVNC’s enterprise value on a fully-diluted basis is about $1.1B (#msg-135963594, #msg-135963545). I previously estimated that AGN’s Botox franchise had a net present value of $24B (#msg-127654469), so there is plainly a lot of headroom here.

However, if you are looking for merely a trade, you might do better to wait for RVNC to raise capital, which they are almost certain to do in the next few months.

[DewDiligence]

Re: RVNC valuation

…do you still think [it’s] significantly undervalued at current level?

I think RVNC is a solid buy for long-term investors. The company is now almost assured to launch a best-in-class product in a fast-growing market in the next two years or so.

Moreover, the addressable market is truly global. As emerging middle classes in formerly poor countries gain more disposable income, one of the things they want to spend it on is looking good.

As of today’s market close, RVNC’s enterprise value on a fully-diluted basis is about $1.0B (see #msg-136731006 and #msg-136731078), which is about 9% less than it was when you posted yesterday. I previously estimated that AGN’s Botox franchise (including aesthetic and therapeutic indications) had a net present value of $24B (#msg-127654469), so there is plainly a lot of headroom here.

[DewDiligence]

Re: RVNC’s valuation (updated)

…do you still think it’s significantly undervalued at current level?

I think RVNC is a solid buy for long-term investors. The company is now almost assured to launch a best-in-class product in a fast-growing market in the next two years or so.

Moreover, the addressable market is truly global. As emerging middle classes in formerly poor countries gain more disposable income, one of the things they want to spend it on is looking good.

As I’m typing this (share price=$32.40), RVNC’s enterprise value on a fully-diluted basis is about $1.06B (see #msg-136930804 and #msg-136931339). I previously estimated that AGN’s Botox franchise (including aesthetic and therapeutic indications) had a net present value of $24B (#msg-127654469), so there is plainly a lot of headroom here.

[DewDiligence]

Re: RVNC’s valuation (updated)

…do you still think it’s significantly undervalued at current level?

RVNC is a solid buy for long-term investors, IMO. Based on the phase-3 results from the SAKURA-1 and SAKURA-2 studies reported in Dec 2015 (#msg-136643306, #msg-136644001), RVNC is almost assured to launch a best-in-class product in a fast-growing market within the next two years.

Moreover, the addressable market is truly global. As emerging middle classes in formerly poor countries gain more disposable income, one of the things they want to spend it on is looking good.

As I’m typing this (share price=$31.30), RVNC’s enterprise value on a fully-diluted basis is about $975M (see #msg-139013493 and #msg-139013481). I previously estimated that AGN’s Botox franchise (including aesthetic and therapeutic indications) had a net present value of $24B (#msg-127654469), so there is plainly a lot of headroom here.

At present, my opinion of the RVNC-MYL collaboration for a Botox biosimilar is neutral—i.e., on balance it neither enhances nor detracts from the underlying investment thesis described above.

[DewDiligence]

Re: RVNC’s valuation (updated)

…do you still think it’s significantly undervalued at current level?

RVNC is a solid buy for long-term investors, IMO. Based on the phase-3 results from the SAKURA-1 and SAKURA-2 studies reported in Dec 2017 (#msg-136643306, #msg-136644001), RVNC is almost assured to launch a best-in-class product in a fast-growing market within the next 18-24 months.

Moreover, the addressable market is truly global. As emerging middle classes in formerly poor countries gain more disposable income, one of the things they want to spend it on is looking good.

As I’m typing this (share price=$26.85), RVNC’s enterprise value on a fully-diluted basis is only $880M (#msg-142681047).

The current worldwide market (aesthetic + therapeutic) for botulinum toxins is about $5B, and this market is expected to reach $10B in 2023, if not sooner. I previously estimated that AGN’s Botox franchise (including aesthetic and therapeutic indications) had a net present value of $24B (#msg-127654469), so there is plainly a lot of headroom for RVNC.

[DewDiligence]

Re: RVNC’s valuation (updated)

…do you still think it’s significantly undervalued at current level?

RVNC is a solid buy for long-term investors, IMO. Based on the phase-3 results from the SAKURA-1 and SAKURA-2 studies reported in Dec 2017 (#msg-136643306, #msg-136644001), RVNC is almost assured to launch a best-in-class product in a fast-growing market within the next 18 months.

Moreover, the addressable market is truly global. As emerging middle classes in formerly poor countries gain more disposable income, one of the things they want to spend it on is looking good.

As I’m typing this (share price=$24.88), RVNC’s enterprise value on a fully-diluted basis is only $835M (#msg-144654960).

The current worldwide market (aesthetic + therapeutic) for botulinum toxins is about $5B, and this market is expected to reach $10B in 2023, if not sooner. I previously estimated that AGN’s Botox franchise (including aesthetic and therapeutic indications) had a net present value of $24B (#msg-127654469) and, based on the passage of time, that figure is already too low. Plainly, there is ample headroom for RVNC at the current valuation.