Zonagen (zona) - good buy? Message Board

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Biotech / Medical : Zonagen (zona) - good buy?

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To: F. Jay Abella, III who wrote (1946)	1/22/1998 1:47:00 PM
From: khrnyc	Read Replies (1) of 7041

Dear Mr. Abella (and Tokyo), Ironically, I arrived at my valuation for Zona by using some of the information provided at your website (http://www.westergaard.com:8080/Med/Valuation/index.htm). I thought your comments were quite helpful. Please keep in mind that I do not claim to be an analyst nor that I am unequivocally right. These just happen to be the assumptions I've made and the valuations that I arrived at. First, I considered only the contribution of Vasomax to the yearly sales of Zona. Second, I determined total market valuation by the following equation: Total market (=$1.5 Billion) x penetration (=15%) x profit margin (total sales - cogs, marketing, G&A, R&D, and taxes) (=15%) x the weighting factor given at your site for a company with phase III completed data (=.5) x a multiple (=25x) and added the $70 million in cash that Zona currently has. This yieled a total market valuation of about $490,000,000 which I then divided by the total number of shares (11.5 million) to get a current sare price of about $42. For NDA submission I simply used the weighting factor of 0.8 that was provided at your web site. This yielded a post-NDA share price of a $67.

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