Source Healthcare Analytics Reports Omontys Sales Lumpiness
One of the major data providers, Source Healthcare Analytics (Wolters Kluwer), showed reduced Omontys sales for
November, but this data provider has historically produced variable estimates.
We maintain our investment thesis and Buy rating.
Our preferred data vendor, IMS Health, will report its November sales estimates on 12/29/12.
AFFY, Buy, $20.47, 12/19/12 intraday pricing.
Target Price Methodology/Risks
Maintain Buy rating and $37 target price. To generate 12-month target prices for development-stage biotech
companies, we use a 30x multiple of future earnings, which represents a discount to the 20-year average earnings
multiple for profitable biotech companies of 37x. We then discount back at 10%-30%, depending on the company’s
stage of development and implied risk. For AFFY, we apply a 25% discount rate on a 20x multiple of our estimated
2015 diluted EPS estimate of $3.45 to generate a $37 target price. As the only clinical program in development at
Affymax, our valuation is based solely on the commercial success of Omontys.