PERSONAL SPECTRAL COVERAGE AND TARGET PRICE
I will try to value again Spectral shares with a conservative method. First of all, I suppose that Spectral will be approved by FDA for Toraymyxin with around 20% absolute mortality rate ( it could be between 15 and 25%). Spectral is targeting 150,000 patients with septic shock in North America and I soppose 5% market penetration in the first year of commercialization ( 2017-2018 ). It's meant 7500 patients for the first year. It's least than one patient per hospital per year. ( There is a total of around 8000 hospitals in North America ) Total cost per patient (including EAA ) is around 28,000$ in canadian money. Total revenue is 7,500 x 28,000$ = 210,000,000$. In their website, Spectral used 40% EBITDA but I will use only 30% for the first year. So EBITDA will be 30% of 210,000,000$ = 63,000,000$. Net profit will be also 63,000,000$ because they will not pay taxes with the operating loss carry-forward and research and development expenditures which may be used to reduce future years taxable income. With 210 M shares out, we have a PPS (profit per share) of 0,30$. For biotech company like Spectral, it is very conservative to use a multiple of 20 to obtain 6,00$ share valuation. TARGET PRICE IN ONE YEAR : 6,00$ ( Years after, easy between 8 to 15$ ) This is my own opinion, do your due diligence P.S. I am a chartered accountant.