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ONYX Pharmaceuticals, Inc. Message Board

  • kot882001 kot882001 May 8, 2013 12:25 PM Flag

    What is ONXX worth?

    From time to time, I'm trying to come up with the number what ONXX would fetch in buyout (or without it). Usually, I value buyout scenario at 4 times annual sales and non-buyout about 2.5-3 times. But with ONXX that simplistic approach does not work (Nevaxtar is shared with Bayer and it is not clear how to incorporate royalties in that calculation), so I decided to try to figure out net "potential" earnings and assuming P/E 15.
    1. Nevaxtar. So far produces 280m (everything on annual basis). Lets assume 300m.
    2. Kipro. 62% profit margin and potential sales of 1B (during CC was said that so far they have 1k patients and potential for 20-30k . So if from 1k they made 62M on 1k then on 20k...) produce 620m.
    3. Stirvaga: I assume eventually they will get 150m royalties.
    So far we've 300+620+150=1070M X 15= 16B, i.e $200 share/price....Probably in 2-3 years...
    Comments, different numbers?
    (At this point, however, it looks like that ONXX going to purchase something and not being aquired...)

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    • We have had such a huge run in biopharma that I think they will be the hunters rather than the prey. Big pharma missed out. I still think biopharma has room to run though. It's all about improving the lives of the aging babyboomers and who can do it better than biopharma?

    • So far we've 300+620+150=1070M X 15= 16B, i.e $200 share/price....Probably in 2-3 years...
      Comments, different numbers?

      You are confusing "Revenue" with "profits". The 1070M you came up with is Revenue, not profits. The usual market cap number we shoot for is 4-5x revevnue. With your estimation, we should be looking at $4-5B market cap.or between $55 and $70 per share.

      • 1 Reply to rooomars
      • Roomars, I'm not confusing anything (taking into consideration that I'm tax accountant...),- Nevaxtar sales were 200m/q and ONXX got only 70m, i.e this number is after expenses. Stirvaga- is pure royalties, so, no expenses here and Kyrp with expected sales of 1B I deducted only cost of good sold based upon their guidance regarding "profit margin" 62%-64%. There is no other expenses in cases of buyout and in case "no buyout, then there are of course R&D & G&A expenses, but there is also (potential) additional sources of income. However, I fully agree that in case no-buyout, the value should be adjusted to $150.

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