I guesstimate the royalty stream post Teva approval at $45 million per year. Since it falls kerplunk to the bottom line, I value it pretty high at 9x, around $400 million. Pretty sure I used a $2.4 billion total market, 25 percent market share, 25 percent price cut, 10 percent royalty.
I had cash (pre Teva approval) coming in at around $50 million per quarter, say $66 million Jan thru April, only 3 more months should be pretty safe, I think. Current mc is well under $600 million so if they had ~ $140 million at year end then the current valuation is covered by cash and value of royalties, and easily so (if I haven't overlooked something significant). Looks like everything else is not reflected in current price -- copaxone, m118, any other pipeline stuff, and platform. Now, it's true that mnta could just keep burning cash and have everything else fail to materialize. That is the risk at this level, but I say that's not going to happen. If you don't like this deal, you are a hard case...(:>) |
