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Neurocrine Biosciences Inc. Message Board

  • jlymd jlymd Mar 21, 2004 4:31 PM Flag

    Valuation

    With all due respect to Chris Jenner whose a smart guy, I don't see from a valuation perspective that 1B in Indiplon sales translates to triple the share price. Someone can correct me but I believe the split with Pfizer was closer to 50:50 and even at that royalty rate, a price above 70/share doesn't seem warranted. The value of the rest of the pipeline at this point doesn't warrant it either. Results of the 6-month open label efficacy study in elderly pts is due Q104

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    • This is a stock that will trade @50 to 60 times earnings, so a $120M to the bottom line will do just that. Thats about a $6 Billion market cap on $500M in sales after 50/50 split on a $1 Billion in sales projected by FY2007. Projections on the seize of the insomnia market is $5 Billion by FY2010. So IMO Indiplon could have sales in the $2 Billion range by FY2010.

      • 1 Reply to frogsleapmerlot
      • Keep in mind, NBIX is a 1-trick pony biotech for the forseeable future. The number of BTs with 1 product that can carry a 60 multiple are limited, the reason being the discount the street needs to afford a company with that kind of business risk. Even with PFE as a partner, the chances of Indiplon ramping to 1B in sales in 3 years with Estorra, Ambien MR and generic Ambien on the market is at best a stretch.

 
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