npat & valuation, page-55

Matt, apologies, very little time of late to reply - in fact I've got to sign-off from HC for at least a month. In response to my fonda earnings expectations for ACL, let me cover the US market as my assumptions are basically the same for RoW. The only differences in my Row calc are Gross Margin assumptions and earn-in expectations.

FY12:
*GSK to report circa 370M in sales
*I believe GSK are selling or will be selling 5.9M units of Arixtra
*Each unit will sell in the wholesale market for approx $62 per dose. This is on average, as Arixtra comes in various strengths per/mL. It is also usually sold in batches.
*The AzG unit price will be $59.
*The ACL generic will be priced at $37 (which is a 40% discount to innovator unit price).
*ACL market share will be 50% (conservative). I can detail reasons for this.
*DRL will be able to produce fonda at 65% Gross MArgins (cheap inputs)
*USD/AUD FX rate of 1:1 i.e anything made in US is the exact amount translated to AUD (big difference from previous assumptions of 80c)

Calc:
[59000000x.50]x37=$109150000 This is 50% market share at price DRL will be charging the market.

$109150000 x (Gross Margin of 65%)=$70947500

$70947500 x (Profit Share of 50%)=$35473750

$35473750 x (Net Profit Margin after Tax 70%)=$24831625

As you can see my NPAT number is larger than yours in FY12 but in the same ball-park. This translates to circa $0.15EPS and at implied PE mulitple x10 = $1.50 SP. This is in line with my previous posts on the matter.