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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: Biomaven who wrote (3585)	4/26/2001 12:07:59 AM
From: BulbaMan	Read Replies (2) \| Respond to of 52153

Peter: Back in Nov., I tried to come up with a rough estimate of the percentage of Axiom owned by Cadus as well as the total value of Axiom. I posted my estimate on the SI Cadus message board. Below is a copy of that post. As you can see, in my Nov. post, I estimated that Axiom's total worth was $50-$100 million and that the KDUS percentage was 30% (or worth about $15-$30 million) before Biacore's $4 million investment. However, Rick Harmon, in a post made in early Jan., indicated the Cadus stake in Axiom is worth far less and he estimated that following Biacore's investment, "KDUS owns approx. 20% of Axiom, and the value of that 20% is about $3 million." Given the recent hires at Axiom and the Arena deal, perhaps Rick will update his estimate. In any case, IMHO, KDUS continues to be significantly undervalued but I doubt the stock will do much until Icahn makes his move. My post on the SI KDUS message board (11/20/00) In my attempt to estimate the value of the KDUS stake in Axiom, I found the following paragraph in the KDUS 1999 10K: "In May 1997, the Company purchased $2.0 million of convertible preferred stock in Axiom, representing approximately 26% of the outstanding shares of Axiom on an as converted basis. In June 1998, the Company purchased an additional $2.0 million of convertible preferred stock in Axiom. This increased the Company's equity interest in Axiom to approximately 30% of Axiom's then outstanding shares on an as converted basis, after taking into account the purchase by JAFCO of shares of convertible preferred stock of Axiom." Based on the numbers above, it appears the JAFCO investment substantially increased Axiom's valuation. And, using my very rusty math, I came up with a $35 million valuation for Axiom prior to the June 1998 KDUS investment of $2 million and $37 million post-investment. This would put a $9.1 million value on the KDUS stake pre-investment (26% of $35 million) and an $11.1 million value post-investment (30% of $37 million). Of course, the biotech sector has had a huge jump in valuation since June 1998. So, my best guess is that when Biacore invested in Axiom it was valued at $50-$100 million, setting the KDUS 30% stake at $15-$30 million.