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SAVIENT PHARM INC Message Board

  • crawfordlong1815 crawfordlong1815 Jan 13, 2011 2:35 PM Flag

    $8 target makes incredible assumptions.

    Let's look at this carefully. At a PE of 10 it assumes a profit of 80 cents a share. 10 x .8 = 8. At 80 million shares outstanding that is 0.8 cents profit x 80 million. $64 million. Assume 50% margins, that is sales of 128 million. Divide 128 million by say $30,000 per treatment (very conservative) you get 4300 patients for the whole year. So if you believe that a chronic life debilitating disease that affects 90-300K pts will only attract 4300 patient, then you are correct. If you believe that severe pain from gout flares, ED visits, opioids in the middle of the night and 10,000/hospital, ER visits are a better alternative, then go ahead and sell this stock. I will be buying and holding for 2-3 years.

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    • P/e of 10??? COmpanies this size and early growth trade 30-40 P/E today and 10.

    • There is NO profit for Savient in the forseeable future. It lost money every day. For the income statment, -59M last q, -5M for -2q, -8M for -3q -1M for -4q. They need to sell at least 200M K to break even.

      Pricing of K will be far less than $2300 per vial. They may fetch $1100~$1800 per vial at most.

      Good luck for you holding, there may be another sucker who will pay $13.5 for your shares.

      • 3 Replies to ywu999
      • You are correct in that biotechs lose money due to R and D and no income. However, once the product is approved the burn rate will substantially decrease. If you look at my assumptions you will notice a net margin of 50% so I have accounted to expenses related to marketing, supporting and managing product sales. Insurance companies are very sharp when it comes to approving a treatment or not. They will see how much their current cost of therapy is for a patient, for refract gout it can be very high.

      • you realize they are burning less cash now and you cant assume those same losses cause they were for trial costs and getting it fda approved. Now their cost will only be people and marketing etc. There burn rate will be prob like 10MM a quarter once full launch and team is hired (and that may be high) so they will only need to have 1333 patients a year at 30$k a year on the drug to break even. Thats a very small amount in relation to patient population.

      • LOL.

        A baby biotech starts selling its 1st drug and we get a genius to tell us how it's not a good stock because it's been losing money.

        DNDN was trading at $17 after Provenge approval. It went to 57, and is steady in the 30's.

        Can you do a past earnings analysis on that one and get back to use here?

 
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