Cipher Pharmaceuticals Inc T.CPH

Proxy Based Fair Value

[nozzpack]

I  use Biosyent ( RX...$7.07 ) as an excellent proxy for Cipher as both have excellent balance sheets and no debt and growth has been muted..

The comparison with RX is very instructive as to CPH fair value, as follows..all values in CAD with sales annualized..

                         Book              Market cap.   Net earnings.      Ebitda      Sales

 

Cipher.             $43 m.            $24 m.              $2.1 m.             $3.5m.    $26 m

 

Biostent.          $ 25 m            $90 m.              $0.72 m.          $1.1m       $22 m
 

As is very obvious from the above statistics, CPH exceeds RX in all financial metrics except market cap.

Viewed from this perspective , CPH has a significantly higher gross margin, net margin and Ebitda margin,....three of the classic measures of stock value....and trades at just 0.6 times book whereas RX trades at 3.5 times book.

The logical conclusion is that CPH should at least be trading with a market cap of $90 million which is over $3 per share.

One might argue and rightly so that CPH sales are slowly contracting.
However RX growth has been stagnant.

Further, RX has no major product in its pipeline that will substantively boost sales like Trulance.

In my view, Cipher is an easy double from here, if not more.

Sent from my iPad

[r0nald]

Thank you for this comparison! Always good to get confirmation that Cipher is undervalued. I've been following for quite some time now and the trading in its shares is very strange. There is a party out there consistently walking down the share price and very often sells in the last seconds/minutes of trading at the bid. It's obvious someone wants to depress the share price. I do not

[nozzpack]

Exactly my opinion ..that the share price is being contained for a purpose. Either merger or takeover .