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Biotech / Medical : VD's Model Portfolio & Discussion Thread
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To: Andrew H who wrote (1405)6/25/1997 1:36:00 AM
From: Pseudo Biologist   of 9719
 
Andrew, i'll take a shot CSFB = Credit Suisse First Boston; i.e, an analyst (not responsible for spelling errors).

X% discount to present value. If 1999 is 1.5 years away and the value then is suposed to be $45; then the "discounted" present value (pv) would result by applying the factor (1-0.3)_raised_to_the_1.5-th power. To make it simpler say $45 is exactly 2 years from today,then pv would be 45 times 0.7 times 0.7 or about $20 or so.

This is the most common way I've seen of valuing biotechs. The key is not so much this last step, but how one comes up with the $45 in the first place.

PB
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