What Wilson completely forget in their great “analysis“ is...

What Wilson completely forget in their great “analysis“ is something that you call in German “KGV“.

I dont know the English term for it,but this is one of the most important tools how to calculate the fair shareprice of a stock.

You calculate it by dividing the actual shareprice by the profit per share:

- Shareprice: A$ 2.68
- Profit per share from last financial year: A$ 38.2 million / 180 million shares = 0,21

- A$ 2.68 / 0,21 = 12,76 = lets say 13

A “KGV“ of 13 is ULTRA LOW for a small Biotech-company !!

GSK has a KGV of 11 and Roche has a KGV of 12 and these are multi-national Giants !!
Companies comparable to Biota like Sinovac or Quidel have KGV´s between 21 and 23 !

So imho at least 20 should be a fair figure for Biotas KGV.
And with a KGV of 20 the calculation of a fair share-price based on last years profit is:

- 0,21 x 20 = A$ 4,20

So this would be a fair shareprice based on LAST YEARS profit - and this doesnt even take the pipeline (LANI, HRV) into account !

And when I take into account that Relenza-sales will be better in the future and that GSK sells
50% of their yearly productions-capacity (= 95 million courses) the calculation would be:

- 95 million courses x A$ 25 = 2.735 billion A$
- 7% for Biota = 166 million A$
- minus lets say 66 million for costs and takeovers = 100 million A$
- A$ 100 million / 180 million shares: 0,55

FAIR SHAREPRICE:

0,55 x 20 = A$ 11,11

Imho the fair share-price based on GSK selling 95 million courses Relenza per year would be A$ 11 (and not A$ 3.40 like Wilson says) !!

Regards

Eric
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Please make sure that you do your own research as this is only my opinion and not an advice.