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Alexza Pharmaceuticals Inc. Message Board

  • atlnsider atlnsider Jun 10, 2013 4:12 PM Flag

    Alexza Valuation After the Teva Deal for ADASUVE

    I just finished my analysis of Alexza's value per share after the Teva deal. I did a discounted cash flow analysis over the next 10 years. I considered the following: Alexza's royalty income from Teva and Grupo Ferrer, Alexza's milestone payments from Teva and Alexza's manufacturing profit for each ADASUVE inhaler produced.

    I posted my analysis on Seeking Alpha, and you can see a link for the article on Twitter @ATLnsider.

    According to my valuation analysis, ALXA's stock is worth about $16.28 per share. I am very interested to see what the other analysts who cover Alexza come up with when they update their research notes and price targets.

    Sentiment: Strong Buy

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    • I have had this stock forever...hopefully it will be worth the wait. Thanks for your evaluation.

    • Seeking Alpha just re-published my valuation of Alexza. It hit Yahoo Finance this time under "Headlines".

      Sentiment: Strong Buy

    • Good job on your valuation. I'm not an analyst, but I thought your numbers were fair. I'm long ALXA and hope you're right about their future. Have you ever looked at a company called Apricus Biosciences? Both ALXA and APRI are companies in similar stages of development with large upside potential. What do guys like you and Moaamar, who are better statisticians than I, think of Apricus? If you get a chance and don't mind, take a look and let me know.

    • I have to say, after reading your article through, while I agree with your bottom line, there is a fatal flaw in your analysis. You calculated 10 episodes per patient per year in the hospital setting alone, but you took the number of all patients as if all of them are hospitalized... bipolar and schizophrenia agitation happens 75% of the time in a non hospital environment, so I am afraid your whole analysis is wrong with the numbers. I do agree with the bottom line, but for totally other reasons- once sales of adusuve will kick in, the entire value of stacato will be raised, and enterprise value will be much greater. But no way alxa will break even by 2015 with only adusuve sales, that is just a miscalculation my friend!

      • 2 Replies to moaamar1778
      • moaamar1778,

        First, you have to take the percentage of the population that suffer from schizophrenia and bipolar disorder. Then you take the percentage of that population who experiences episodes of acute agitation (90%). Then you have to take the percentage of this subset who "seek treatment" for acute agitation (50%). "Seek treatment" is the key phrase. That means that they go to a health care provider for help because they are suffering from acute agitation.

        Most of the patients who are treated for acute agitation, are treated in a hospital emergency room, or in the psychiatric ward of a hospital, or in an in-patient psychiatric facility. It is only the cases of acute agitation that have escalated to the point that the family members, caregivers, or even the police have taken the affected patient in to get treatment for acute agitation are the cases that are counted in the research.

        If you look at the first 2 slides, you will see that based upon market research, most patients treated for acute agitation have 11 to 12 episodes per year. My analysis was even more conservative than that, I used 10 episodes per year.

        The numbers on the Alexza slides were researched and vetted by both Alexza and Teva. I believe their numbers, and I stand by my valuation analysis.

        Sentiment: Strong Buy

      • If you look at the chart you see peek sales in 2016 for example. 4.2 Million seek treatment, ALXA only addresses 148k of those patients. His numbers are very conservative.

        If ALXA partners on any of the other drugs and/or limits the R&D, then the whole chart is wrong as well, breakeven is much faster, and net profits are much bigger. Could add another $20 Million a year to net profits if they are able to partner up for R&D/Licensing now that the device can be proven efficient.

    • how did you build in the royalities as King has not disclosed them ?

    • You forgot to subtract $12 for the "King effect".

      • 2 Replies to cancerfighter2011
      • How much can we add now for the last "King affect"?

      • Kind had Cephalon buy his previous company for $450MIL on $6MIL in sales? Cephalon grew those to $500MIL by 2010 with aggressive marketing. Teva will be aggressively marketing Alexza's Adasuve drug.

        The staccato platform alone could be worth an enormous amount to any competitor that could streamline 10-30 different trials each year.

        You keep talking about King, his salary etc. If King is really money hungry, have him sell the company for a quick 5-15x current PPS and lets be done with it already. The company is worth that much on the staccato alone, add in tax benefits, cash on hand, this all equates to an enormous enterprise value beyond our current market cap. I estimate the cash and tax benefits equal at least $200 Million in cold hard cash.

        There are alot of connections to be made as well. King selling his company to Cephalon, then bringing on director J. Kevin Buchi to ALXA who was CEO of Cephalon when the company was sold to TEVA and was also a VP at Teva. Something is brewing here. You don't want to miss out my man.

    • My estimation was 22 $ prior to recent dilutions, so I think you wre Wright on the money there. Value will surface once asia qnd rest of the world deal for adusuve will be announced and when teva revenues will start to kick in. My target date for the true value is March 2014. Good luck to all longs