RE:Scotia reiterates the target price of $4.50 for PLI
The assumptions used behind Scotia's reiteration $4.50 for PLI are: "We have not changed any numbers in our model and have therefore left our target price at $4.50 and maintained our Sector Outperform rating. Our target price is based on a DCF valuation of $4.54 per share. We value PBI-4050 by assuming that successful development of the drug in IPF would lead to an approval in 2020 and an asset value of $5 billion (~US$4 billion) which is a ~50% discount to the valuation paid by Roche to acquire InterMune for its IPF drug. We assume PBI-4050 has a 25% probability of being approved and discount the resulting $1.25 billion value at 11% for 4 years to arrive at a current value of $825 million."