GREY:ATBPF - Post by User
Post by
Madmanmadoxon Feb 28, 2018 10:07am
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Post# 27635370
How to value
How to valueIf we make the assumption that this passes 2b ... what is the value ballpark range would a Big Pharma in just the USA region would go for?
Their slide deck has 1.5B USA sales annually for Celebrex which is likely its closest benchmark (My understanding is sales went higher after, reuters had a source with 3B+ worldwide in 2014, and down to 750M after the patent).
The investor deck does say Global IP protection till ~2030.
If N=10 (assume only 10 years to work with patent), r= 18% (standard for bio). Lets be conservative at annual sales 1B (same as Celebrex did first year) and no growth... then lets assume 50% margin (Super conservative)
US Partner Perspective:
NPV = 2.247B; Assume the big pharma partner splits the NPV 85/15 (15% for ATE) to leave both partners with positive NPV.
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ATE's value of deal = Upfront 337M + NPV of Royalties (assume at 5% of sales which is incorpoated in the US partners margin of 50%; low for industry when drug under patent).
ATE'S total value of deal for US Market = 337M +225M =562M and ATE'S US partner still walks away with 1.91B and any TV after patent ends and sales begin to decline.
Given market value is below 50M it seems this company has a lot of room to run and this doesn't even consider the Western Europe market...
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