VALUATIONBased on our long-term revenue and expense projections,...

VALUATION
Based on our long-term revenue and expense projections, and if development of PBT2 and other drug candidates in Prana's pipeline proceeds without any significant delays, unfavorable trial results, or other negative surprises, we think Prana could become profitable in 2016 based on regulatory approvals and launch of PBT2 for Huntington’s Disease in the US and EU, both in 2016. We use a discounted P/E model applied to our projected 2016 EPS to arrive at our current value of $4.50 per share and one-year price target of $6.00 per share. In our view, a 45% discount rate is appropriate for current uncertainties regarding the timing and outcome of ongoing clinical trials. We believe a 25x P/E multiple is appropriate for our projection of the company's growth.