RE:RE:Mackie Report is outWell at least someone's valuing it now. As we know, that 10% is a bit of a finger-in-the-wind kind of number to just get the price target he wants and not have something crazy like the Cannacord guy. Not sure what factors would get him to move that probability, but good to know 10% is roughly $1.70.
What it means though is that if and when he's ready to add cancer, the revenues will be much earlier, across multiple markets, likely larger than those NASH numbers, and he likely won't discount it as much because it will de-risk quicker if successful. Really shows the financial leverage impact to succeeding with the SORT1+ platform. I would guess if he added it in today at a 10% probability it would be higher than the NASH NPV because of the revenue start date. Doubt we'll see any analyst with value for it until we get those results though. Fair enough.
SPCEO1 wrote: Mackie's report is 44 pages, so a lot of effort went into it. But here is how he reached his target price:
"Our valuation for TH (US$3.95/share) is based on a sum-of-the-parts (SOTP) methodology that factors in the company’s commercial segment and the NASH project. To value TH’s commercial segment, we applied a 2.9x 2021 EV/Sales multiple to our new 2021 total revenue estimate of US$77.6M discounted by 10% - equaling US$2.27/share. To value TH’s NASH project, we calculated a probability-adjusted NPV assuming a 10% success rate – equaling US$1.69/share (see Figure 33). Our final target price of US$3.95/share is the sum of the value of the two parts."
He actually has NASH sales at nearly $600 million in 2027 and almost $2 billion in 2033. He uses a 15% discout rate. The 10% success rate assumption is why he adds so little to the price target. So, for every 10% more you would like to add to the success rate, you can add another US$1.69 to the target price. So, if you think TH has a 50% chance of success, you would end up with a price target of US$10.72.
SPCEO1 wrote: It is a big report that I don't have time to read at the moment but he raises the target price to $3.95 US as he gives some credit for NASH. More later.