Greetings, Staff. What was today's news announcement that you referred to? There's not been a reference to Agouron all week in Dow Jones, or Biz Wire or PRNewswire. What was it?
As to valuation, AGPH should settle in the range of 5X - 10X sales, as many other biotechs do when they get a product on the market. They announced shipment in March of enough product to supply 21,000 users, roughly $10mm in wholesale revs. This annualizes to $120mm in annual sales. Penetration of the market is estimated at a much higher level, 20%-40% of 500,000 people in the US. European approval is pending, Japanese approval is also in the future.
Of course, they will share revenue with partners JT and Roche. For comparative purposes Biochem Pharma, a company worth 2.5 times as much as Agouron settled for royalties from Glaxo. Vertex, which sells for 25% more than Agouron, is still a year away from its first product approval, and also has Glaxo for a partner.
If you like the short side of the market (who doesn't lately?) Agouron is nowhere near the most compelling value. If Agouron ramps rapidly and takes market share from Merck, value could easily double or triple from here. |
