Bottle2 The only way to value the vaxs is exactly how Baillieu...

Bottle2
The only way to value the vaxs is exactly how Baillieu Holst (BH) did it last year when they valued AHZ at $2.50 - $5.50 (PC) with the main factors being-
- size of market US$3B, now $6B
- percent probability of success, they claimed 21%
- partnering terms for up front payments, they claimed $100M-$200M for each of HSV & HPV
- partnering terms for ongoing milestone success, they claims another$300M-$500M for HSV & $120M-$150M for HPV
- partnering royalty payments, they claimed 10%-14%
see below

http://www.admedus.com/us/wp-content/uploads/sites/2/2014/09/LifeSciences_13Jun14.pdf

" VALUATION METHODOLOGY.
Our probability-weighted DCF of Admedus was built as follows: -
Our WACC was 14.2% (High risk); -
We modelled payoffs from CardioCel (self-distributed) and the HSV-2 and HPV vaccine candidates (partnered, 21% probability of clinical and regulatory success); -
We assumed HSV-2 is licensed in FY16 (US$100-200m in upfronts, US$300-500m in milestones, 10-14% royalties) and HPV in FY18 (US$100-200m in upfronts, US$120- 150m in milestones, 10-14% royalties), with the two products launching around 2-3 years after licensing. -
We assumed peak sales of US$600-900m for Cardiocel, US$2.5-3.2bn for HSV-2 and US$1.2-2.2bn for HPV."

If we accept that the peak sales for HSV is US$6B as stated by AHZ at the recent AGM which is double BH figures from last year and may even be conservative considering global infection of at least 900M people and if the market for Gardisil is US$3B annual sales for Merck as opposed to BH figures of a max market of US$2B and we accept peak sales for CC at 900M then :-

YES the MC should be north of $1B with a SP of $5.50 and may overshoot. I estimated on standard EPS ratios & PE ratios that AHZ SP can be $8-$11 based of $200M annual CC sales as claimed by the CFO in "5-10 years".

So why not. Sure the whole concept looks like a ridiculous ramping exercise right now but the market is supposed to be forward looking and forward evaluating.

So a PE ratio of 1.35 (135/100) right now for 2025 CC earnings is a joke. Even a current PI ratio is 135/13.5 of 10 (MC/income) is rather small considering exponential growth projections.

Some biotechs have PE PI ratios of 200-1 forget 10-1 or 1.35-1 and it may be justified if the earnings are growing at 40%pa like Facebook Alibaba etc but AHZ is growing at 50%-90%pa right now well above that and BH predicted sales income for 2015 at $33M but its only $13M. If in 2016 sales income doubles or triples and goes to $33M then the SP really ought to quadruple as it has a low PE & POI ratio with a 0c valuation for the vaxs.

If AM went a 5000 bagger into FMG making AF Rowley Catlow filthy rich why cant BioMD/AHC into AHZ from the same shell, same holders and with larger markets & growth projections?

FMG is a one dimensional business, dig IO and export sell to China using large carriers. AHZ is very different.

Can FMG grow at 90% sales pa? Can FMG cure heart disease, herpes and cervical cancers, is AHZs market limited just to China? No. No No.
Can Pr Frazer find other virus cures? Can the vax market be larger than FMGs? Can CC/Adapt have a pipeline of bodywide applications that havent been used yet...yes yes yes.

So the upside is large, $7 why not? Malicious ramping right now but what will the SP be with sales of $200M for CC in 5-10 years or vax production and global vax sales of US$3Bpa like Gardisil?

So the market has to rerate AHZ much higher on future earnings & exponential growth with a PE of 20-100 right now not 1-10. BH already did it all for them in black & white. It is the pre-eminent model for AHZ SP valuation.