David,
Hope I am not being obnoxious. My trying to figure out a worst case scenario is actually an attempt to find out if all SEPR's ICE end up competing for the generic market, what kind of earning would we get. My assumption is that if generic companies can make good money, then even if SEPR ended up competing for the generic market, it can survive very well. So I was trying to give SEPR a generic P/E multiple as the bottomline. However, it is my belief that, at the same price, ICE will grab the entire generic market for each drug, driving out would-be competitors. SEPR can raise its price a little more later to make a reasonable profit.
I think even in this worst case scenario, it is a VERY enviable position to be in. Witness the generics dying to get their hands on expiring drugs like Prozac and Claritin etc and SEPR have many of these best sellers locked up. This is my bottom line calculation. I suspect the situation is somewhere between this and your estimate (and MSDW, Gruntal etc etc). Needless to say, propulsid, if works , makes SEPR a $300 stock overnight but then that is in your model and will not be deal with here.
I think people have underestimated the powerful earnings that can come from grabing the generic market of 20-30 drugs some of which are monsters. |
