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Shire plc Message Board

  • fgnoms fgnoms Mar 11, 1999 4:34 PM Flag



    So by just how much is Shire undervalued. Firstly
    they are selling two existing high growth drugs for
    ADHD with annualised sales of 21% x $596M = $125M. In
    a takeover situation these drugs must be worth 10 x
    $125M = $1250M but say we discount this by 60% to
    arrive at a figure of $750M. Then they are selling
    Carbatrol for epilepsy, which has started to successfully
    compete in a market worth over $220M p.a. - this has to
    be worth $250M. These existing drugs are therefore
    worth about $1B, which is just about the current market
    value of the Company. But then they will shortly be
    selling the Alzheimers drug Galantamine, which by all
    accounts will in no time become the world's no 1 drug for
    the world's fastest growing disease. How many
    billions is this worth - has anyone got any ideas? Then
    Galantamine could also be used for Chronic Fatigue Syndrome.
    And then finally they have had early trials success
    with Lambda. Tomorrow we shall hopefully know far more
    from the conservative Board but this stock should be
    worth three or four times its current valuation. My
    guess would be that J & J will buy Shire well before
    Galantamine's true worth ever surfaces.

    This topic is deleted.
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    • I don't want to bust anyone's balloon, but,
      according to Joe Riccardo at Bear Stearns, the company is
      worth $30. on a sum-of-the-parts basis. He and his
      associate own .6% of the shares. Book value and current
      earnings don't justify current price. They estimate $30.
      price in 12-18 months.

    • Thanks for the interesting valuation analysis.
      Re: your comment on buyout by Johnson & Johnson, is
      Shire up for sale? I haven't heard anything along those
      lines, but I quess anything is for sale at the right


      • 1 Reply to testlink
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