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Biotech / Medical : Biotech Valuation

CRSP 53.85

-4.5%

Jan 9 9:30 AM EST

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To: Sam Citron who wrote (11923)	6/5/2004 11:56:53 AM
From: scaram(o)uche	Read Replies (1) of 52153

Traditional biotech valuation is knowing what a pharma will pay for a given project at a given state of maturity....... knowing market size, competitive projects, chance of technical success, etc. and estimating/guessing how many suitors there would be for a given project and what they'd pay for it. Then you add up all the projects and cash, throw in a premium for infrastructure and personnel if it's a big-science company, and you know what a pharma will PAY for a biotech or what a large biotech can and will PAY for a small biotech. Presto, valuation. What other real-world metric could possibly count? Most biotechs don't have the "E" in EPS, so you figure out what a project is WORTH in a real-world marketing infrastructure, and therefore what someone is willing to pay for it. You start at Medline and go from there. The guts of data that you needed to start at your own question had been put out on the table. We had discussed the royalty rate (rkrw) and market size (Peter). Peter has given us the very best analysis to be had of the relative label merits. The remaining parts of the agreement are described in the Pliva press release. You have everything in hand that a large biotech suitor has. Instead of trying to get Peter to go through some magic hand waving, casting Cooper as either Gary Lyons or David Robinson in a three year leading role to come up with a projected PE?? You could spend your time making your own estimate of the company's REAL value. You might even have a perspective from which others could profit. There's going to be a TON of noise this weekend and next week about a Sugen-derived molecule. Those who read and integrate what is shared here at SI are very familiar with the concept, due to the relentless sharing of research by Miljenko Zuanic. Nobody minds someone who is all take and no give. But it's gotta come with a "TIA". You got incredibly FAST and concise analysis of the situation. Spoon fed comes to mind.

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