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ЕЛН Message Board

  • xazp xazp Dec 1, 2004 9:03 PM Flag

    Deutsche Bank's Report

    I read their report, and I think they have fair estimates of Antegren. Specifically, they are assuming that Antegren gets incremental revenues from success from RA and Chron's, whereas a more conservative estimate would include only MS revenues, since MS is the only one really approved to date.

    When you look at the way they arrive at their current estimates, they are taking their 2008 eps estimate of $1.39, multiplying it by a P/E of 35, and discounting by 20% for 3 years to get to a current year estimate.

    If you back those numbers out, these are the prices they are predicting:
    2005 - $28 (8% upside from now)
    2006 - $33 (27% gain from now)
    2007 - $40 (54% gain)
    2008 - $48 (85% gain)

    That doesn't seem too gloomy to me: an 85% gain over 3 years exceeds my own projections for ELN and also marks a substantially better return than what I would guess the average equity would return.

    If you take their same assumptions, but change the discount rate to 12%, which is the long term expectation of what normal equities will return, you get a picture like this:

    2005 - $35
    2006 - $38
    2007 - $43
    2008 - $48

    which would imply a 35% gain over next year, again, nothing I would complain about.

    So ... I'm not sure that the DB report is really as pessimistic as the headline news makes it out to be.

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