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Biotech / Medical : Biotech News
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To: Dave O. who wrote (6621)9/3/2009 10:46:37 AM
From: Dave O.1 Recommendation   of 7143
 
< a minimum of $20 per share (5 times peak sales of $900 mln, discounted by 25%) could be obtained from a potential buyer >

I think the multiplier above is in error. SVNT has a max of 65 million shares outstanding. If you took 5 x $900 and discounted by 25% you'd be at $3.38 billion valuation, or $52/share. No way an acquiring company would pay 5 x peak revenues for a yet to be approved drug. But if you plug in 2 as the multiplier, which is much more reasonable, then you get to $20/share as the JMP analyst projected.
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