buy side is building, page-36

Nuts, last week I made a rudimentary attempt at valuing CVAC alone (see below).

My balls and all everything goes to plan, full production with solid margins valuation came to $3 a share. Assuming a dividend payout ratio of 70%..... dividends would be about 27c a share.

Feel free to add on valuations for the other two technologies ;)

It's nice to dream
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My attempt to put a number on PRR's long term value

Obviously the key assumption is that the technology does work, and will get to market. But I am yet to see anything but encouraging news and endorsements on this front.

Stolen from Nomura Report - Market Opportunity for CVAC:

The World Health Organisation (WHO) predicts that c70,000 females (aged 0-75 years) in the US and EU will be diagnosed with ovarian cancer in 2011

Of which, c85% will have epithelial-type ovarian cancer which is targeted by PRR’s treatment.

We believe approximately 65% or 39,000 patients will be eligible for surgery because their cancer is likely to be diagnosed as stage I-III, based on historical distribution patterns.

Of these, we note that 70% of optimally debulked ovarian cancer patients are likely to have recurrence 24 months later, on the basis of historical recurrence patterns.

Of these, we assume that 80% of recurrent ovarian cancer patients have the MUC-1 type, which would be sensitive to PRR’s C-Vac treatment.

If we assume that each treatment would be reimbursed at USD90,000 per annum (in line with reimbursement rates from
US public and private insurers for Dendreon’s Provenge, which treats prostate cancer), then the potential market size for PRR’s C-Vac treatment is in the order of cUSD2bn
per annum.

Numora included USA & EU only, so let's bump that up 30% for the rest of the world (I think there is more than enough affluence in Asia / Middle East to justify this mark up) to cUSD2.6bn. They then went on to assume that only 25% of these ideal candidates for CVAC would get the treatment, I think that's conservative, so I bump it up to 30%.

That gives you estimated revenue of $780 Mil

Let's assume that after learning from Dendreons mistakes, they can achieve a 50% gross profit margin, or annual profit of $390 Mil.

Apply a P/E of 8x, and you get $3.12Billion. Divided by shares issued you get about $3 per share