first i will say that im long on affy with 9000 shares.
the real market cap is around 350-550 milion and here Here are the reasons
roch's mircera will be in the market around mid 2014. It's a much more superior drug then peginestide.
In the most optimistic lookout affy will sell to 35,000 patients (10% market share) per year at a selling price of 5000$ per patient per year. That is 175,000,000 annual sales for the next 10 years. The gross profit will be around 50% and after 50% profit sharing with takeda affy will earn 43 million dollars per year in the next 10 years starting 2012.
This will only happened if they will be fast marketing and do a very good job before 2014, because mircera is a better drug and will be marketed aggressively by roch.
So, if we will take p/e of 10 (industry average 14) affymax is worth 430 million$ or 12.5$ per share The real upside will be if fda will later approve peg for non dialysis petiens, or if there will be a buy out from a big company.
I disagree that mircera is better than peg. However I am not a doc to insist on this. Also ESA as a class is questionable.
But, let's get to my point: Nothing today is cheaper and more convenient then Peg!
CMS(Medicare and Medicaid Services ) covering ESA for CKD patients. And I guess that was one on the reasons or maybe even main reason why panel voted so overwhelmingly in favor of peg. It is smilar , how FDA pushes in favor of generics whenever it can last 2 years to drive down drugs market prices. Currently ESA market in USA occupied by couple fat cats. And Roch with it's mircera will target Amgen's market share. To addition to , why Roch should even consider AFFY as a competitor , if it is very likely that AFFY will be bought out within a month after FDAs approval? What is the problem for any major player to buy AFFY with pps at $6 or $20?
AFFY's PPS at $6 is total bargain, unless there is some negative info about peg or trials which will be revealed before March.
if anyone here watched the FDA panel meeting they would know FDA was clearly in favor of approving Peg, there's not a chance of a negative FDA outcome. In fact, I would not be surprised if they approve it before the deadline, assuming the label is agreed on. There is no real negative, just shorting and fear mongering.
Actually the real market cap is determined by multiplying the total number of shares by each days price at each moment or the close. It never matters what analysis one does, only what price you can sell it for. Currently around 6/share.....