Its all about revenue potential. Based on the stated $300,000 per patient per year and a patient population of 10,000 in the U.S. & EU; that equates to $3B/year and with 25M shares out, it is $120/share in revenue. That is straight value, no premium, no extra for anything else, just straight value.
$1,200/share valuation at P/E of 10
$2,400/share valuation at P/E of 20
Now that is the total available market. If they capture just 10% then fair value lands at $120-$240/share.
Remember that is is for patients who are dying, so it isn't elective like weight loss drugs, or other medications. Therefore the patient population is highly motivated to seek out remedies! There is very little competition as well given the dangerous side effects of the only competing drug Kynmaro and its significantly lower efficacy.
Also, retention is going to be very high, near 100% as patients need the medication to stay alive. This isn't a drug for grey hair or weight loss where the patient might go off of it after achieving some goal. Therefore, patients will stick with it because it works.
With a potential of $1,200-$2,400/share in the long term, and $120-$240 in the short term, this is a compelling buy.
It will take time to realize that potential value. Nobody ever has 100% marketshare, so what we need to assess is what the achievable marketshare is in order to determine the valuation. Certainly 10% market penetration is very easy to do and not over the top, so the $120-$240/share valuation is definitely in play. Who knows what the total global market is that is achievable, because there is no way that all 10,000 patients will be able to get the medication at these prices. Sure maybe the EU will kick in for a lot of them, given the socialist nature of their medicine, but the US even with Obamacare won't pick up that big a tab for those without insurance. So does that mean the total market is 3/4? 1/2? Only time will tell.
To be fair though, it won't achieve 100% market penetration in the first year, probably closer to 10%. Only after 3 years or so will it become the mainstream medication of choice. So it should be $100+ stock this year and $300/share by the end of 2014.
Your financial analysis is sound, the only question is the time frame. That is why it isn't over $1,000 yet, because of the timing. Once they start realizing substantial revenues, you'll see a major spike up in the share price.
So let's adjust the math for the morons who can't understand statistical significance.
$3B - $68M/year in costs = $2.932B
Divide that by 25M shares and it is $117.28M/year in EARNINGS.
$1,172.80/share valued at P/E of 10
$2,345.60/share valued at P/E of 20.
The MATH still works, even for the ignorant liars who try to distort the truth.
Adamwang AKA censored50 AKA biotekker AKA chesaresus (he has so many IDs to pretend there is more than one of him), anyway, he ridicules the math but can't challenge the math.