RE:RE:How do we determine fair market cap from a licensing deal?
Thanks, I've been looking into how licensing deals are made historically, and it seems there are 3 main methods to determine valuation of a pre-clinical company.
1. Cost To Develop 2. Or Potential Revenue 3. Or Compare Peers
Cost To Develop
This is basically when the licensee tries to value the company based on what it would cost them to develop a similar product. Since Sernova is patent protected, I'd imagine this would be quite difficult and costly. Not exactly sure how much Sernova has spent to develop this product either. I'd imagine somewhere in the hundreds of millions.
Potential revenue
As I mentioned previously, with only 20% market share they could be looking at upwards of 4.8 billion per year. This is very significant when large pharma typically only makes between 20 and 30 billion a year.
Compare Peers
We all know about sigilon with their 1 point something billion market cap. And then that other company that got bought out for 950M. This comparison in my opinion would be low balling Sernova and their fair valuation.
Anyway, I think if me being a nobody retail investor can figure this out, I'm sure Dr. Toleikis and team can figure this out too. So I think all of you judging Dr. Toleikis on his deal making prowess, need to see the numbers will speak for themselves. And that even on the low end, we should all have a pretty positive outlook on whats to come.
This does not constitute any financial advice and I am not a financial advisor.