ELAN .........Valuation Target $37
Elan pretty healthy Partner........good strong SP right now.
Leerink Swann have them Targeted at $37. Umm.....I think......LOL!!
Valuation:
I believe a fair value of ELN shares in the 12-month horizon is approximately $40 derived from Monte Carlo simulation with an expected EPS of $3.51 discounted at 15% (accounted for development risk in simulation) and a PE of 35X.
The 2015E EPS of $3.19 depicted in the published P&L differs from the EPS used for valuation purposes in that the valuation calculations are based on expected EPS, $3.51, derived from the Monte Carlo simulation. Given the manner by which the simulation operates, in simulated trials, revenues may differ from those in any separate trial. Therefore, EPS estimates derived from simulation are slightly different than those calculated from average revenues, as is the case shown on this P&L. Using the $3.19 EPS estimate, a 12-month fair value for ELN would be $37.
Risks include Tysabri Sales. Will PML affect sales. The outcome of the U.S. and EU regulatory review of Tysabri as a treatment for Crohn's disease is a near term catalyst/risk.
......A Healthy Partner can only benefit Transition in that it can put the analysts at ease that the Partner , whether it's Merck or Novo or Elan; whoever it is, can fulfill it's financial obligations to develop Transitions Drugs. In Elans case that would be $200,000,000.00.
For Novo thats still up in the air but an expanded INT Agreement with Novo would be a lot more than the current $48 Mil. A lot more. Yup!!
I for one hope Elan does real well in its other pursuits.