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ONYX Pharmaceuticals, AŞ Message Board

  • kot882001 kot882001 Jun 29, 2012 9:34 PM Flag

    What is ONXX worth

    Let me provide my version of "back of envelope" calculation (see article in SA).
    The assamptions:
    1.The buyout price is usually about 4 times sales.
    2.The total sales of Nevaxtar now around 480 mil, growing, so lets assume .5 B.
    3. Carfi EXPECTED sales are between 5.b to 1.5b so lets assume another .5B
    So we already have .5+.5=1B X 4= 4B
    4. Rego: ONXX gets 20% royalties, so I assume it will be around 100m. Using P/E 10 it contributes another 1B to buyout price.
    5. Cash on hands - around .6B.
    So, the total buyout price is:4B+1B+.6B= 5.6B, i.e around $85 per share. Of course if you make any other assumpitons the buyout price will be higher or lower...
    Who will buy ONXX? (If at all). Besides Bayer and some Japanese company, in my view,- no one.
    Now, more interesting question: what will happen if there is no buyout? It could be argued that in long run, when sales of new drugs start increasing ONXX will go to above mentioned $85 or even higher. I, however, believe that if buyout does not materialize in 1-2 months after FDA approval, ONXX will do exactly the same thing it did before: it will buy some promising compound/s
    (after all carfi is not exactly their in-house development...). My understanding that they will look for something that could be brought to market in 2-3 years. Last time when they did it the stock price took a dive, but as you can see this strategy worked pretty good in long run.
    So, if there is no buyout until September, I'd assume that in short term stock will suffer and'll go back to mid-50, as a result of traders disappointment, but eventually, when sales start mounting, will recover to higher level.
    And the last remark: it will be interesting to see what effect on stock price will have approval (that seems almost certain at this point).
    Comments, please!

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