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Sarepta Therapeutics, Inc. Message Board

  • system_architect_enterprise system_architect_enterprise Mar 21, 2013 8:17 AM Flag

    Buyout would need to be $100+ (worth $190-$380/share) math attached

    Eteplirsen could be a $500M annual product (based on 2,000 patients). The $500M figure comes from TheStreet, so you know how reliable that number is... That article goes on to e plain that the 2,000 patients could grow to 7,000 within 4 years, and even then is only 1/4 of the addressable market.

    Anyway. At $500M/year that figures to be based on 26M shares, revenue of about $19.23/share (round down to $19). Even with an ultra-conservative PE ratio of 10 that puts valuation around $190/share. At a PE of 20 (which is more appropriate given a projected growth from 2K patients to 7K (annualized growth of more than (50% so you could argue a PE of up to 50) but at a PE of 20 that values shares at $380/share.

    Therefore any buyout would have to be well over $100/share otherwise shareholders would be better served to wait it out & stay independent.

    DNDN math: at 50% year over Yale growth, and potentially a market of 28,000 patients (14x the original 2,000 number) you could argue the $500M= $19/share *14 = $266/share @ PE of 50 = $13,300/share.
    Just to show how ridiculous it can get.

    Still $100+ is very reasonable for a buyout.

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