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Keryx Biopharmaceuticals Inc. Message Board

  • radiokbc radiokbc Feb 10, 2013 3:19 PM Flag

    Projected SHARE PRICE based on EPS, P/E, potential revenue for KERX ($30 to $46 in a year)

    Let's try to come up with the reasonable share price we should be trading at now.

    The figures will be AFTER distributing the royalty fees for less than 10% to other entities.
    Partnership cost will be made.

    First,

    $750 million (potential total revenue), assuming we capture only 50% of the market out of $1.5 billion annualy - *I believe Zerenex can mostly wipe out all the competition including genetics though (over 80% is my belief but for the sake of argument, let's pretend 50% market capture).

    $30 million (our total burn rate annually)

    $375 million (50% to a potential partner. Zerenex deserves better but for the sake of argument)

    $337.5 (10% to royalty entities - it should be less but for the sake of argument)

    $307.5 million pure net income after all the expenses ($337.5 mil. - $30 mil.)

    100 million O/S ( it's less but for faster calculation)

    $3.075 (EPS - $307.5/100)

    $46.125 ( Projected price per share in a year based on PE ratio of 15)

    $30.75 (Projected Price Per Share in a year based on PE ratio of 10)

    I expect we go that much way before then.
    Remember, my calculation was very much conservative and I didn't even put in figures for pre-dialysis which is three times bigger than this and all the indication points to another huge success of trial).
    Japan's phase III pre-dialysis trial data is about to come out (any day now) and ours this summber.

    Sentiment: Strong Buy

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    • Thanks for your analysis, which I think is a great start (and obviously so do a lot of other people). I agree with you that it's conservative.

      Here's what I would tweak:

      I think you were too aggressive in ...

      1. assuming that the burn rate would remain at $30M/year. There will be cost of goods sold and other new operating expenses.
      2. ignoring income taxes
      3. small chance of not being approved on the first try
      4. small chance of IP problems in US

      But I think this is more than offset by your conservatism in the following areas:
      5. Assuming only a 50% market share for the dialysis market. I'd go with 80%.
      6. Not reflecting the 8% or so annual increase in sales. (This works out to a doubling (to $3B) in 9 years.)
      7. Most importantly, not reflecting the pre-dialysis market, which could be 4x greater than the dialysis market.

      My back-of-envelope adjustments to your projected EPS are:

      IMPACT ON EPS
      -----------------------
      1. 50% reduction
      2. 25% reduction
      3. 10% reduction
      4. 5% reduction
      5. 60% increase
      6. 80% increase
      7. 200% increase

      Putting these all together, we get: 0.5 x 0.75 x 0.9 x 0.95 x 1.6 x 1.8 x 3.0 = 2.77, or nearly a tripling of your EPS numbers.

      INeedless to say, i'm very bullish on KERX!

      Sentiment: Strong Buy

    • You may want to read this if you want how JP Morgan and others put price target at $15.
      It is without predialysis data. And the figure here is EXTREMELY CONSERVATIVE. So the actual target price will be HIGHER.

      Sentiment: Strong Buy

      • 1 Reply to auserid
      • Thanks for bumping this. Great projection. The only thing that is incorrect is that according to the last Presentation..Japan is not conducting any studies and in fact pre dialysis was included in the Japanese filing..This was something I was confused about and couldnt find anything about it on the Torii website. Of course if you disagree listen to Ronnie Boy's last conference presentation. Its also good to know how confident they are in their patent protection which Ron goes into detail about on it...

        Sentiment: Strong Buy

    • lunch at the standard on me in nY when in ny, send private e-mail on ihub. Thanks for great reasoning :)

    • It is starting now.

    • This is probably the most accurate forecast and explains why others seem to believe $45 will be the buyout price.  Others are projecting long term for $65 to $70 and that is assuming Bentsur expands the pipeline before the buyout.  With milestone payments coming in steadily, it won't be hard acquiring a new compound to fill any such void in the pipeline.  Depending on what he acquires, in a few years, this equity could seriously see values of excess of $100 per share ignited by a few short squeezes and the right news.  I would believe we'd see at least a two for one split if we go that right  and perhaps better.  Personally, I think the CEO will close a deal somewhere in the $35 to $45 range within the next 3 to 6 months.  Short interest remains high while institutions are waiting in line to get their orders filled.  This is the real deal and anyone trying to short it should remain extremely cautious how long they sit on that wager.  A stock like this could bankrupt a hedge fund in a NY minute with the right news.  

      It seems there is a lot of good analysis at the open every day and then you guys surrender this board to day traders that have not the slightest inclination of biotechs and how to formulate  true values or present an accurate forecast.  I avoid trading this equity and if I do, I  never think about doing it on the  open on any given day.  The market makers are playing many games and usually at the open or in premarket and at the close.  My advice to anyone opening a new position is to do it in strides because the MMs are most definitely trying to shake off the majority of retailers.  This gives retailers who do want in, an opportunity to accumulate a very large position which normally should cost you in excess of $15 for an equity even slightly close of the explosive potential.    Retailers buying are in the driver's seat and can pretty much dictate their price but need to always be on guard because if  a buyout is announced on any given day before having acquired their desired  positions,   They will have passed up an opportunity of a lifetime.  I can't imagine why any of the daytraders are still complaining at these prices.  You could not ask for a better gift from the Eall Street mms at these more than fair prices.

      Sentiment: Buy

    • morning stromg longs

    • This is a good read for noobs. Thanks.

      Sentiment: Strong Buy

    • leetown@ymail.com leetown Feb 11, 2013 9:27 AM Flag

      Nice analysis.

      Sentiment: Strong Buy

    • roflmao

      Sentiment: Strong Sell

    • until FDA and USPTO brings more clarity to NCE and patent extension issues the P/E ratio of 10 is too generous in my opinion, I would go with P/E~3 or 4 which I think is more reasonable at the moment, I think this should be $9 to $12 stock at the moment, however good pre dialysis data should push it over $20 even before FDA ruling...

      • 3 Replies to a_gasparyan
      • P/E ratio was based on nothing but the current dialysis zerenex, excluding Japanese payment, Pre-dialysis potential, etc. And the figures were driven by a very conservative calculation. I see around $15 to $20 once Pre-dialysis news ot partnership talk hits the wire. It's very much likely to see PPS at $10 to $13 very soon as overblown IP exclusivity issue, profit taking, and other market noise is fading away.

      • Hell A_gas.

        I tend to agree over the short term. Also, the projections given above by radio assume that the entire $1.5 billion market is up for grabs. Those initial numbers have to be reduced by 25-30% for the portion of the current market that is owned by Japan and from which Keryx will only get a small royality. Doing that, the projections using all the same numbers and 10-15PE come down to the $25-35 range. Also, keryx4sale indicated below some other good points about penetration and drop out rates that plague any new drug. Giving additional consideration to these issues one may get right in the your park...maybe a bit higher...nonetheless closer to your numbers. The predialysis market remains a black box for the moment.

        Zing

      • As most concerned people in the field put it, NCE issue is overblown for KERX, and it shouldn't be a trouble for Zerenex as it has multiple means to achieve exclusivity.

        The street will figure it out very soon, very very soon.

        Sentiment: Strong Buy

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