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Affymax, Inc. (AFFY) Message Board

  • jagan1961 jagan1961 Jun 1, 2013 12:28 PM Flag

    OK, I posted many times - One more time to know what AFFY is worth?

    AFFY - may not have cash, after Nektar it will have a Net balance of 15-20 MLN $.

    However after April 2013 agreement with Takeda, they have a NET ROYALTY PAYOUT on WW OMONTYS sales btw - 13 -21% - This is NET ROYALTY PAYOUT on SALES.

    So, let us see what it means to you as a Shareholder. When OMONTYS hit the market, US accounts for 2 BLN sales and WW another 2 BLN!

    With Frensius problems OMONTYS is sure to prevail.

    With 1 BLN Sales they will receive close to 130 MLN $ - 170 MLN $ net royalty payout - For AFFY and its shareholders NO SWEAT deal. It is 3.50-3.75 $ payout per share.
    With 2 BLN Sales they will receive close to - 300-350 MLN $ payout. Which is around $8-9 per share.
    With 4 BLN Sales AFFY will receive - 600-800 MLN $ payout each year, which almost 19-22$ per share.

    In all AFFY need to spend 1 Penny and NO EFFORT?

    These are all Perpetual Payouts, that means as long as the Product OMONTYS is in the Market place AFFY will receive this Royalty Payout?

    So what would the shareholder get? $ 5 nah, $10 nah, $15 may be $20 for sure (for now!!)

    Hang in tight, there should be no Panic at all.

    The SINGLE BEST THING TO HAVE HAPPENED TO AFFY WAS FIRING OF ENTIRE STAFF (THOSE FAT CATS) AND TAKEDA TAKING CONTROL OVER THE DRUG!

    Everything else DO NOT MATTER HERE!

    GLTA LONGS!

    Sentiment: Strong Buy

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Jagan: could you explain how their could be so many shorts trapped if 98% of the stock is held by institutions? I guess what Im saying is, are those same institutions buying calls also hedged with shorting? I believe this is going to run, just dont get how any institutions could have gotten caught, as opposed to retailers who arent as prevy to information behind closed doors. Thanks

    • curtis238@aol.com curtis238 Jun 1, 2013 11:20 PM Flag

      thats a very intelligent post. I'd love to see affy at 10$. Yeeeee baby

      Sentiment: Buy

    • I think you are overly optimistic. I'm long but not thinking this will be 4 billion dollar drug, no offense meant. Quarterly sales prior to being taken off the market were 25 MM. So that would make it a 100 million/year drug. Given that it was early in the expansion, I'd say they could do several fold better. However, if you remember, sales came in 20% under the 25MM expectation for the last quarter of 2012, in at 19MM. So I'd give them a 500 MM yearly income, of which AFFY gets 13-20%, so let's just say 15%.
      Therefore, early on they make 15% of 100 MM (15 million for AFFY). Later on they make 15% of 500 MM (75 million for affy).

      Dilute the $75 MM/year by 37 million shares, and that's $2.00/share per year. Add in 180 Million payment, which is about $4.86/share. Their income then is 2.00/year+4.86 up front. I'd say that since there is no chance of any other drug coming out of the company and most likely this contract is limited to 17 years because that's when the patent will most likely run out, I'd put the company at a value of 38.86.

      Now, that's only if their drug is brought back. Cut the price by 3 for the chance that it will be brought back, and the company is worth about 12 dollars. Add in a 2 fold "you're screwed" factor as takeda works over affy, and you're at 6 dollars. Shareholders of affy are lucky that there will be NOLs for sale, which adds 29% to the buy out price (in my previous post I quoted takeda as getting a reduction in price of 23% which increases affy's value by 1/.77=1.29 fold) and I come up with a value of $7.79. This translates to 288 million for the company, which might be slightly on the lower side, but I'd rather be conservative and have that "you're screwed" factor added in. Fair value would be $15.58, but i doubt anyone would buy this for fair value, so we're looking for a range between 7.79 and 15.58.

      • 3 Replies to mershaw2001
      • The dialysis patients constitutes almost 80-90% of the population.

        The revenue estimate is based on the Dialysis setting only.

        GLTA LONGS!

        Sentiment: Strong Buy

      • I agree with your range but your valuation doesn't take into account that Omontys is a game changer in this space and the growing demand of the anemia for CKD market going forward. This drug is once a month treatment versus Epo current standard of care which is administered 12 times a month. Think for a moment the scale of economy that large dialysis centers (Fresnius or Davita ...etc) can benefit from the adoption of Omontys platform.Do you have any idea how much saving in workforce spending can this centers realize if they switch to O(perhaps a rational estimate would be at least a saving of 30% staffing). I am not even talking about the macro-economic impact of Omontys for Medicare and Medicaid spending. Didn't Amgen Epo sales account for $450 millions for last quarter? So, once O. is back in the market and the safety profile post trial is confirmed within a year or two there is no doubt it could fetch a $billion sales. Your conservative valuation doesn't take into account all these paradigms shift in this space.

        Sentiment: Hold

      • I'm not overly optimistic here. First of all the rollout of the drug was cautious and it takes time. You can't bring in all the facilities under one Drug immediately added to this is some patients can never will be able to use Omontys.

        The sales was just for US and they expected 900 MLN sales in the 2nd year. Currently we are expecting a WW rollout, the market is 4 BLN in all.

        OMONTYS as when introduced within the first 3 years should be able to capture atleast 2 BLN $ worth of sales.

        Moreover there is no 17 year period, OK the Patents might expire however as long as OMONTYS product in place, we will be receiving a royalty for it.

        I did not take the 180 MLN mile stone payment too.

        If they give a buyout price equivalent to NOL for the company, (600 MLN) anyone will take it!

        GLTA LONGS!

        Sentiment: Strong Buy

    • ALSO Brenner Group - an experienced restructuring firm - has managed this deal, Brenner Group are masters of re-structuring companies and located in Polo Alto - Sand Rd guys - they have a reputation to uphold - google - Brenner Group, AFFY

      Sentiment: Strong Buy

    • BUMP

    • Great post! I am taking some chances Monday. Almost jumped in on Friday..GLA

    • The stock is trading for under $2 so its safe to say that investors dont see this as a likely outcome, agreed?

      • 2 Replies to pokerpro8222
      • Until the drug is cleared in the US or approved in Europe then the stock price will not reflect this.
        If the shareholder meeting does happen on the 6th then I would expect some type of PR prior to laying out the game plan. Otherwise there is gonna be some #$%$ off shareholders at that meeting.

        Weak Communication via 8ks with every negative disclaimer possible is biggest reason for $2 share price.

      • That is where the opportunity comes in. When it was $3 and the AFFY management was intact I said SELL. And when it went $1+ and AFFY management wound up I said BUY.

        You can buy P&G, Colgate and wait.
        There were lots of Blame game and NO Coordination btw AFFY and Takeda. Takeda did the leg work and AFFY Fat Cats robbing shareholders. Now it is gone.

        I'm happy with my position, will hold whatever the oucome may be. With Frensius issues on the Forefront, it seems to be a simple resolution. None of the other Dialysis center groups reported any issues, where OMONTYS was administered.

        GLTA LONGS!

        Sentiment: Strong Buy

    • Good post and possible, but I think Takeda will take da Affymax Co. over. Lol

      • 1 Reply to wildbill400
      • Every long should know what they hold! BUMPING IT UP!

        Though buyout and GO PRIVATE transactions are possible, if April 2013 agreement holds good and OMONTYS is reintroduced in the market place, this is what it is worth!

        I still believe in this agreement, however with the 40 MLN trades I doubt this is going to happen, a BUYOUT or GO PRIVATE transaction is possible.

        GLTA LONGS!

        Sentiment: Strong Buy

 
AFFY
0.634+0.020(+1.67%)Apr 17 3:57 PMEDT

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