Peter,
three-year price targets for many of our companies
While it may or may not make sense, it pushes the edge on hyping in my opinion, because everyone hears "price target" and assumes one year. Also, when you only do it for some of your companies, that only magnifies the effect.
Sepracor earnings from a drug three or four years out are actually more predictable than for typical biotech drugs one year away from approval.
Not sure I can completely agree, there's a reason they have to go through clinical trials and aren't just ANDA approvals.
Hence the standard metric of discounting a drug at 40% a year for three years "because it's just in Phase I" doesn't make sense here.
First, a decent analyst will probably give SEPR ICEs a quicker acceptance curve and potentially larger market share than a NCE. Thus the non-NCE is partly accounted for.
Second, if the analyst does feel that the ICE strategy makes approval less risky, they shouldn't be using 40% (BTW, I might use 45% for no human results released at all), 30-35% might be more appropriate.
Don't disagree with the potential SEPR, just splitting hairs on the price target issue in general. Afterall, wouldn't want to disturb the Groupthink <g>.
biowa |
