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Price target in 2021To console myself I checked my rough calculation for a price target three years from now, and dare to write about it. I would appreciate your comments. I think that by the end of 2021, Onpattro sales would exceed 1000 MM agreeing with most analysts. The actual price for Onpattro might be as low as 300 K per person per year on average, reimbursements from EU countries being lower (~350 K in US and ~250 K in EU). By 2021, assume that 2000 patients would take the drug in the US and 1000 patients do in EU. When you multiply the prices by the number of people taking them, you get about 1000 MM which is a low end of analysts’ predictions for the revenue from Onpattro. Now, the sales of Givosiran and the same for Lumasiran may reach 500 MM by then. Royalties from Inclisiran may flow in, but I neglect it. The total revenue from the three drugs = 1000 + 500 = 1500 MM I claim this is a conservative estimate for the revenue. To find the earnings per share, we need to subtract the annual expenditure for SG&A and R&D and divide by the outstanding share number. The current outlay is 600 MM per year but assume the expenditure will increase to 700 MM in three years. About 30% taxes and royalties have to be paid from the remaining 800 MM: 800 X (1 - 0.3) = 560 MM. For the first few years of a drug launch, the federal tax is 0. If this is true, the bottom line is 720 MM, not 560 MM. One of things that work for Alnylam investors is its low number of outstanding shares which is just above 100 MM, thanks to the help extended by Novartis in earlier years and by Sanofi. This figure may increase to 110 MM for expanding research and development. Then, the resulting earnings per share is $5 (or $6.5 if the tax is near zero): 560 MM / 110 MM = $5.09 (or 720 MM / 110 MM = 6.55). By 2021 the 2nd gen Onpattro (TTR02sc) will be launched for the indication for FAP phenotype and trials for treating wild TTR genotype would be ongoing. I would not be surprised to see a P/E of 50, giving a price of $250 (or $328). A P/E of 50 is low for a growing biotech. Compare the current P/E of 100 for Vertex after falling from the peak of 111. Good luck with treatment for Alzheimer’s, NASH and HBV could further boost the share price. Write about where I made mistakes. |
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Msg # | Subject | Author | Recs | Date Posted |
34381 | Re: Price target in 2021 | evernewbliss | 2 | 10/21/2018 8:48:16 PM |
34382 | Re: Price target in 2021 | Hoosier | 0 | 10/22/2018 12:59:02 PM |
34386 | Re: Price target in 2021 | Steve_382 | 0 | 10/23/2018 4:03:33 PM |