Magainin Pharm (MAGN) Message Board

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Biotech / Medical : Magainin Pharm (MAGN)

MAGN 9.090

+6.2%

Oct 31 9:30 AM EST

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To: Bob Swift who wrote (202)	7/13/1999 11:41:00 PM
From: Bob Swift	of 233

How much is MAGN worth if it gets FDA approval ? My guess is it will go to $50-75 at the least and possibly much more. This is based on the V-call presentation in which it was stated that the sale is estimated to be 125 millions and MAGN will net $25 millions. Assuming MAGN gets another 25 millions from outside US sales, and divided by 20 million shares, that is $2.5 a share. This is just counting the Europe sales which I assume to be the same deal as US. Last I check most people in Europe do have feet too. Obviously I need to check the Indian deals too but that is a bonus surprise since I do not know how many people have diabetic foot ulcer over there to assign a value to that market (and the affluent asian countries too) At $2.5 a share and give a PE of 30, we arrive at $75 a share. (Generic drug cos gets a 20-25 PE multiple and big pharms gets about 40 so I use 30 as this drug is new and there is no generic competition).If we give a PE of 20, we arrive at a stock price of $50. I assigned a value of zero to the other products in development ($5 for the squalamine since it is in phase 2 and negative $5 for the IL9 since it is preclinical and burns time and resources.That comes out to be 0). A PE of 30 assumes MAGN will use the money to develope other application of this new class of antibiotics. My hunch is that the FDA is not going to say to MAGN we are sorry, we told you wrong, may be you can now go back and redesign the clinical trial and good luck. Am I being too optimistic ? If so, I should let go of the speculative shares I accumulated in the past two weeks.

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