Replies to post #42290 on Innovation Pharmaceuticals Inc (IPIX)

[TomAndries]

This is fun & informative. Thanx & keep going! ;)
As a side note imo Cellceutix isn't getting the media attention it deserves. Whatever future valuation, pundit & media perception (and manipulation) can really hurt a stock. Theoretical valuations can't account for that.

[macnqueso]

Fun w/numbers valuation of K - part 3

So what if K really succeeds over time and becomes a global game changer in the treatment of cancer... then what kind of valuation might we anticipate...

The global cancer market has been estimated to be about 260 billion... I provided a link for this source in a post about a week ago... we know that approximately 50% of all cancers involve p53 mutation... which would make K's potential global market roughly 130 billion...

Since we are playing with numbers let's run two scenarios... the first assumes K captures 10 billion of the potential market share (this number is taken from an excellent SA article on P53 posted early this year following the NYTimes article), the second will assume 10% of global market share or 13 billion... including both stand alone and adjuvant possibilities... I don't really know what K's market share might be globally for cancer... others might be able to help us here... I am just playing with numbers... at this point CTIX would be a grown up company with a global reach and much higher expenses, much different economies of scale, marketing needs and so on... I am going to use Celgene's 2012 numbers as reported in yahoo to guide us here... Celgene showed 26.44% net profit on its gross revenue for 2012... I will use 25%...

10 billion $ scenario -

10 billion in gross rev
25% profit = 2.5 billion
P/E ratio of 20 = 50 billion market cap
150 million fully diluted = pps of $333.33

10% scenario -

13 billion in gross rev
25% profit = 3.25 billion
P/E ratio of 20 = 65 billion market cap
150 million fully diluted = pps of $433.33

What is K worth? This math suggests that K as a global indication for cancer could be worth $300 to $400 per share... as always...jmo...

[macnqueso]

correction to scenario #2 in this post... 7 billion market cap, not 70 billion...

[BonelessCat]

I've done what you're doing before and the numbers become insane very quickly. I've run the numbers for predicting license and partnership valuations, which is a much more conservative prospect, and the numbers still go insane quickly. For example K at typical license structure with a 7% royalty winds up around 35 a share

Against one type cancer

Just in north America

Using royalties on sales, both at the lowest end

There are 5 more major cancers with wild or mutant p53 as primary factors. In addition to North America, there are East Asia, Oceania, and the EU with similar market potentials, which still leaves out huge regions of the world. And, six major cancers does not include even more cancers with p53 factors such as some types of leukemia.

The numbers get just ridiculously insanely huge. .