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Biotech / Medical : Biotech Valuation
CRSP 51.08-2.1%3:35 PM EST
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To: Biomaven who wrote (1113)5/18/2000 4:27:00 PM
From: Lighthouse  Read Replies (1) of 52153
 
Peter - A question

"Seriously, though, I think spinning out the royalties would be a fantastic idea, and I have no doubt it would increase the overall market cap that INCY enjoys at present."

Interesting proposition. In my overall INCY valuation model the most sensitive input number (derived from a laundry list of assumptions) is the overall NPV of the patent portfolio. Any movement on this if akin to hitting the outer arms of a mobile. The whole thing starts moving around. I imagine this is what happenedd today.

Do you feel that spinning this off as a separate entity will allow more clarity on this piece and hence a better valuation? Or are the patent rights sold off via a "Bowie Bond" type offering and thereby getting a higher overall valuation? What do you use the cash for - if you already have $700,000,000 in the bank?

To date I have always thought that retaining the patent rights increased the overall value of INCY. A highly tangible, albeit indeterminant, pure profit stream made INCY a guaranteed genomics/pharma player in the long run. How would spinning this out be of benefit?

This is not a theological position of mine and I am happy to be "shown the light" if I have been wrong.

Cheers,
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