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Biotech / Medical : Biotech Valuation

CRSP 52.60

-1.7%

3:42 PM EST

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To: BulbaMan who wrote (2450)	1/3/2001 9:23:24 PM
From: Biomaven	Read Replies (1) of 52153

BulbaMan, Based on the numbers above, it appears the JAFCO investment substantially increased Axiom's valuation. I don't think that necessarily follows - the point is that Axiom might have issued a whole bunch of shares to JAFCO, and that (rather than an increased value of Axiom) is what accounted for the the modest increase in Cadus's stake . For example, if JAFCO bought around 50% of Axiom for $1, then a second tranche that Cadus bought at the same valuation as before (because it was likely pre-determined) would bring their percentage ownership up by only the requisite few percent from 26% to 30%. The situation is even more complicated, because these convertible preferred deals typically have anti-dilution provisions that may have kicked in which would change the relative ownership stakes further, not to mention the possibility that the preferred that Cadus bought had very different terms from that bought by JAFCO. Bottom line is that I don't think you can extract any useful valuation information from this limited set of facts. Peter

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