Ecoool Turtle Part 1....Many Thanks ET@JoeThat's right, at...

Ecoool Turtle Part 1....Many Thanks ET

@JoeThat's right, at present, I'm a swing seller over $A90, unless the heart and back pain indications come in with accelerated approval, in which case the valuation lifts. Remember, the $A90 is only iff they get a near-term ARDS approval from the FDA and the go-ahead from Novartis to pay the milestones which will fund the huge manufacturing upgrade. Then I'm assuming they can get manufacturing and sales up to treat at a rate of 100,000 patients p.a. by the end of two years. If ARDS does not go ahead (or if approval is delayed by years), then we look to the base valuation of $A2 to $A3 for kids aGvHD plus a discounted valuation for adults aGvHD (could be 2-3x that) then heart and back pain. Heart and back pain could be worth $A20 per share, but it is uncertain as to timing and the very high discount rates make valuations very rubbery. You can really only meaningfully talk about potential sensitivities, which could be huge depending on the stage of disease the treatment is hopefully eventually approved for. For example, if the heart indication is approved for Class 2 Heart Failure, it is obviously a much bigger market than the originally planned treatment for Class 3 patients and would considerably upgrade valuations.Once you've got the sensitivities, then you can start applying your own probability discounts, time frames and NPV discount rates.For those who quibble about the $A90 valuation on ARDS, saying that broker valuations are way below this, I would say that they haven't gone through the broker valuations closely enough, and they don't understand the difference between the sensitivity of a valuation if something works, a heavily discounted NPV and a price target. A lot is said on internet chat rooms by people with great conviction, but very little research or understanding of how valuations work. Most brokers are attempting to set price targets which are "realistic" and don't stray too far from the market price. Note how the valuations have gone up and down in the last year following moves in the share price. They aren't attempting to be an indication of where the share price may actually go if things go right, they are more an indication of everything the "market" is currently factoring in to the daily share price. And you can see that the market is pricing Mesoblast as if these products will not succeed (very low probabilities used, if some indications are included at all) and is also pricing the products as not being approved, nor gaining sales for several years, and then discounting the earnings at ridiculously high discount rates of 15% to 30%.That means there is massive potential upside for the Mesoblast share price if the brokers' assumptions are too conservative. There isn't much downside though if paediatric aGvHD is approved by the FDA in the next 6 months after the OTAT meeting.There are very many moving parts in a valuation of Mesoblast and they can have a tremendous impact on how I view the stock price. As these things change, or their probability of occurrence changes, I could adjust my target price levels. At present, I'm more than happy to stay long.That's a risk/return trade off which suits my risk tolerance. People should do their own research to try to understand the potential numbers rather than just to say they appear too high - a statement which doesn't appear to be based on anything more than their gut feel and a wet finger in the air.