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Biotech / Medical : Incyte (INCY) -- Ignore unavailable to you. Want to Upgrade?

To: lwd who wrote (1307)	1/10/2000 2:22:00 PM
From: Lighthouse	Respond to of 3202

So far and so fast. I am thrilled and I am taking my money. I invested in INCY because I felt that the non database side of the business was not being monetized at all. Today at $115 per share we get a market cap of somewhere in the neighborhood of $3.3 billion. Do not get me wrong I love the company and its products. If I conclude I was wrong I will jump back in: however, at this point I will gladly say thank you and take my profit. Perhaps to my detriment I still believe in the time value of money. Rationale: Database revenues capitalized at 10 times run rate year 2000 revenues = apx. $2 billion. Use $ 1 billion for the NPV on the royalty rate on wet clones taken out by partners. Still leaves you over $300,000,000. Microarray biz is worth something, although with the AFFX IP squabble this may take a while to figure out. Let's say $100,000,000. (This is probably very low, but the revenue numbers for year 2000 are very low as well). Add in the cash they have on the balance sheet. After PFE deal maybe $150,000,000? And now you are pretty close to the current number. {I gave no value to diaDexus because I have not heard squat from that side in a LONG time} Of course lots of people will take issue with this abbreviated back of the envelope calculation. (I know I do) That is fine - just change some of my assumptions and it would be easy to justify a much, much higher price. Alex Brown's now famous $157 target was based on a relative value comparing INCY with MLNM, HGSI, CRA and AFFX. Yes, but relative values in a market that has experienced a tremendous one month run does not give me that much comfort. Cheers,