Here's a simple back-of-the-envelope calculation for Phelan-McDermid.
Neuren says 17,000 - 32,000 potential patients in USA. Lets be conservative and use 17,000
US$350,000 per patient pricing (Daybue US$375,000)
AUD/USD = 0.65
Conservative penetration rate of just 20% = 3,400 patients. Daybue has had 1500 patients try the drug to date - ~17%-25% of the estimated 6,000 - 9,000 potential patients
Net margin = 50% (conservative I'd say)
Plug in these numbers and we get over AU$900 million profit annually, from US market only. This is $7.30 profit per share.
Do a DCF on 10 years to patent expiry, or use a PE of 10 and we get $9 billion or $72 a share.
Apply Macquarie’s 20% risk weighting (80% discount) and we get $14 a share. Add on some time use of money discounts at 12% per annum and we're down to $10 a share. This still has zero value for ROW markets.
How does Macquarie get $10 to $14 a share down to just $2 - $3?
I'd think a more realistic discounted valuation in today's money around $50 a share (using a 4 year discount, 75% success likelihood and 50% value for ROW markets)
NEU Price at posting:
$12.44 Sentiment: Buy Disclosure: Held
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