Ok, so back of the envelope and please feel free to tell me how and why I am wrong.
These are my rough guestimates at SP in certain scenarios (and I might have the order or results wrong so feel free to swap Pitt Hopkins and Angelmans) but if everything goes well...
Pre PMS = $17
Post PMS = $21
Pre PH (midyear which includes 2 further quarters of revenue growth) = $23
Post PH = $27
Pre AM (midyear which includes 2 further quarters of revenue growth) = $27
Post AM = $35
At this point I am beginning to apply a significant multiplier effect given the 3 previous successful P2 trials
Pre PW (End of year which includes 2 further quarters of revenue growth) - $40
Post PW - $50
Takeover and associated considerations
If the 4 trials are positive, I am then anticipating a TO premium of roughly 100% based on the above trials/conditions alone, which brings us to $100 per share. The other aspect to any TO offer is any premium assigned to the broader Autism spectrum and any other potential applications where this may assist with seizures, memory loss/impairment, motor function and a range of other conditions that are significant and not orphan in nature. To that end, while I would like to think that those conditions are worth many many multiples of the $100 SP, I think a further 25-50% premium based on the likelihood that this will be able to successfully apply to the Autism spectrum and Jon's reference to circa 100 other conditions is not unreasonable/unachievable.
An additional 25% premium would bring the SP to $125, which would value the company at circa $USD 10B, which in the grand scheme of things is exceedingly good value for a drug that treats 5 rare conditions, has a very decent chance of being an effective treatment in an astronomical market like Autism and a possible treatment or ancillary, symptom specific treatment in other conditions such as Dementia, Parkinsons, Epilepsy etc - assuming everything goes well in the P2 trials.
Given that Reata was purchased for $USD 6.5B and treats a small fraction of the market outlined above, I think $USD 10B is an absolute bargain! Of course, they are not paying for 5 approved treatments, rather one approved and the potential of one other in 4 conditions, but it would be a bargain nonetheless in my view.
As crazy as it sounds, I can easily see a scenario where this is acquired for more than that and while not quite at the Seagen level ($USD 43B), even though you could mount an argument to justify that price, I could see a world in 24-36 months where $USD 15B is not out of the question. Autism, Alziehmers, Parkinsons, Epilepsy and even possibly TBI and concussion are HUGE markets. If Pfizer can justify $USD 43B for Seagen, which was not as promising as we are in my view, I can easily see a world where someone snaps us up for $USD 15B - as crazy as that seems at the current SP.
Bearing in mind that the average large pharma takeover/acquisition since 2015 was $USD 41B, a 'measily' $10-$15B is a brilliant investment with oodles of upside.
In the immortal words of Darryl Kerrigan - Tell me I'm dreaming!
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