LNC simply has to monetise their annuity/royalty income to prove...

LNC simply has to monetise their annuity/royalty income to prove its value. It is quite obvious that the market doesn't place much value on it as it is at least 4 years away with potential delays and required ramp up to production.


The NPV of this deal is only 1.5b if you discount it at 9%.
It will be interesting to see if an investor will accept this rate of return (after inflation of 3%), given the above risks.


A higher upfront payment for the next deal will be welcomed by the market IMO and the SP reflect the greater surety of cash in the bank.

LNC should still be worth 2.40-2.80 though. It is a little strange that the market gives the business a value of 490m after cash is deducted from the market cap.