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

To: Icebrg who wrote (4869)	10/31/2001 4:29:43 PM
From: Biomaven	Read Replies (1) \| Respond to of 52153

Ice, <NPSP vs. NBIX> That's an interesting question. Although absolute valuation is always very hard, relative valuation should be somewhat easier. 1. Market cap about the same, as you point out. 2. Cash less current liabilities: NPSP around $225m (as of 6/30) and NBIX around $130m. So NBIX's tech value is actually about $85m higher than NPSP's. 3. Burn: NPSP went through about $20m in the first six months, while NBIX ate through around $24m. So again pretty comparable. NBIX just got a hefty $15m milestone so they should do comparatively better the rest of the year. 4. Pipeline: This is of course the biggy. a1) NBIX lead drug is their insomnia drug, NBI-34060. This looks like a very nice compound, but it will be launched into a fairly competitive arena (Ambien, Sonata, and presumably SEPR's Estorra). The current market size here is about a billion, but it's growing pretty rapidly. It's just entering Phase III. They'll need to partner to get much traction. a2) NPSP lead is the osteoporosis drug, recombinant human parathyroid hormone, or ALX1-11. It's in Phase III, with enrollment expected to be completed this year. It's an 18-month trial, so no real advantage in time over the NBIX insomnia drug. Market size is unclear to me. It's a huge overall market, but we're talking about a daily injectable. So presumable only the very worst cases would be candidates. Anyone else comment on this? b1) NBIX next most significant product is the CRF R1 antagonist, NBI 34041, which is currently in Phase I development for anxiety and depression. This is partnered with GSK, and is a potential mega-blockbuster. The partnership actually covers a broad range, including irritable bowel. b2) NPSP responds with the calcimimetic, slowly partnered by AMGN. They just announced decent looking Phase II results. The issue here is why AMGN has been so slow and quiet about this program. It's potentially a big drug, particularly if they can get an indication for secondary HPT. Based just on these two drugs each, I would give a distinct edge to NBIX. Their insomnia drug clearly works and looks very safe, while I think there is more risk in the osteoporosis candidate. Further, on the second programs, GSK is clearly a better partner than AMGN here, and the overall potential is much higher, although NPSP is somewhat further advanced. When we look at the rest of the pipeline, again I think the advantage lies with NBIX. They haven't been talking much about their glioblastoma drug about to enter Phase III, but it looked to me to be a decent drug in a limited market. Their diabetes drug with Taisho also looks interesting (but still very early). For NPSP, they have a bunch of early stage partnered programs, but their short-bowel syndrome drug is the only other later stage drug I can think of. So again advantage NBIX. Bottom line from my perspective is that these are both good companies, but NBIX should have a higher market cap. I personally own a little NPSP and a lot of NBIX. Additional comments from others welcomed - this is a nice pair of companies to compare. Peter

To: Icebrg who wrote (4869)	8/14/2003 5:04:01 PM
From: Icebrg	Read Replies (2) \| Respond to of 52153

NBIX vs. NPSP Back in October we had a situation where subject companies both enjoyed a valuation of about a 1billion USD. Since then, they have trodden different paths. NBIX found their way to a very rich and innovative partnership with Pfizer and is now sporting a tech value of about 1,3 billion USD (market cap. less cash). While NPSP tried their luck with Enzon Pharmaceuticals in a full-scale merger. Something the markets definitively did not appreciate. The merger was reversed at the cost to NPSP of 1,5 million freshly minted shares. But doubts are still lingering as the tech value (market cap. ./. cash + L-T dept) has fallen back to around 660 mUSD. Perhaps not completely well deserved. NPS has seen some major advancments in its pipeline. Amgen is preparing to file an NDA for Cinacalcet. Preos, which is still unpartnered, is moving ahead. The prospects for an approval should be relatively good, as Lilly's Forteo has already been allowed to pass out through the gates at FDA. The company is further expecting to start a pivotal trial for teduglutide (ex. ALX-0600) in Short Bowel Syndrome by year-end. (Plus a proof-of-concept [if there is anything to prove] in Crohn's disease). Reasons enough - I think - to defend the small position, which I took today. There are not too many companies with unpartnered phase III products on the market today. Apart from the merger that never was, NPS appears to be doing most things right. Erik