Replies to post #77007 on Biotech Values

[masterlongevity]

3 yrs for peak market penetration is too soon. Most biologic launches use 5-6 yrs as the peak in calculating NPV

[p3analyze]

Dew, DNDN valuation assumptions, purely WAG

1. Time to peak sale: 5 years
2. Peak US or OUS sale= $1 bi. with OUS lagging by a year.
3. $300 mil ROW cash infusion via 7.5 million common shr equity stake, $100 mil upon EU approval
4. 15% royalty rate going forward
5. Cash burns assuming US factory build-out finishes by Y4E

Are these assumptions realistic? What's the corresponding valuation? What if we stretch time to peak sale to 8 years?

 
                          Y1     Y2     Y3   Y4    Y5    Y6 
 Cash Burn                (150) (250) (200) (400) (300) (300) 
 Cash inflow due to sale   0     100   250   500   800  1000  
 Cash inflow ROW/Royalty   300   100    15    37.5  75   120  
 Net cash flow            150   (50)   65   137.5 575   820 
 amount in mil.