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Geron Corporation (GERN) Message Board

  • adonis00 adonis00 Nov 14, 2013 2:24 PM Flag

    Valuation

    Can someone kindly justify to me how is this company worth 700M?

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    • Sure, no problem.

      Method 1. There are about 15,000 people in the US with myelofibrosis, and Incyte is charging them $84,000 a year for its JAK inhibitor. 15,000 x 84,000 is 1.3 billion a year. (Now, that assumes 100% of the US market, but does not assume any of the rest of the world market.) So if the market is 1.3 billion per year, GERN could easily be worth a multiple of 1.3 billion.

      Method 2. The current market cap of Incyte (INCY) is 7.25 billion. Their only approved drug is a JAK inhibitor, and its only current valuable use is in treatment of myelofibrosis. It does not ever produce partial responses or complete responses. It does decrease symptoms in many people, and also prolongs lifespan. There are a bunch of other companies with JAK inhibitors in phase II or phase III trials. The GERN drug is arguably better than the INCY drug, and has no competition on the horizon. If INCY is worth 7.25 billion, its easy to imagine GERN is worth a tenth of that, or maybe a lot more.

      Note that it doesn't take long to do an MF trial, and since there is no drug that produces complete or partial responses, the efficacy barrier to approval is not high, and the GERN drug has been through enough other trials that there is an idea about safety. That is, approval could be within 3 years.

    • Adonis,
      I attended a seminar recently at Howard Hughes Medical Institute . Speaker was highly experienced director of drug product development. He said minimum cost to a company to go through testing of any drug is in excess of $2billion which is why many pharmas no longer want to develop their own but rather buy little guys out who have a winner. $2 billion divided by 150 million shares puts Geron at twice the price you think is too high.
      IMHO

    • If Imetelstat were to become standard treatment for enough cancers, it could be worth $100 Billion, so it is hard to figure out the right number when it is possible that it can become standard treatment for MF. You have to understand the value is speculative and the range of possible value is unbelievably wide now that we have CRs.

    • Bejebees......GERN is not a valuation stock. Its a speculation play....like a craps table. Bet RED if you think they have winner technology that's about to walk thru the FDA process, or bet BLACK if you think they'll hit a brick wall and fail. Up until recently, most have been betting BLACK. One caution though, if you bet RED and are wrong, yo can lose your whole investment.....if you bet BLACK and are wrong, you can potentially lose everything you have.

      If you are comfy playing the game, kick back and watch the show. Good luck!

      Sentiment: Hold

    • This is the ONLY technology that has directly killed cancer cells. That's bigger than the polio and TB cures.
      Years away but the applications will accelerate. A ground breaking technology

    • Some would say its 3 billion, being conservative. Do some DD

      Sentiment: Strong Buy

    • Ask AstroGoose

    • If you do not really know what is going on educate yourself before asking stupid questions.

      Sentiment: Hold

 
GERN
3.72-0.05(-1.33%)Apr 1 4:00 PMEDT