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Insmed Incorporated Message Board

  • justarook04 justarook04 Apr 24, 2014 2:48 PM Flag

    Possible scenario behind the $51 PT by Schimmer

    Is it not possible that there are "suitors" for Insmed and there needed to be a reasonable valuation done by outside credible financier(s) before Insmed would even think about being bought out? I used to say $2B would be fair but after listening to FUD and many others here, the patents, the NTM market, global markets for Arikayce and IPLEX (too), I am thinking $4B or almost $100/shr. This is all speculative on my part but it could be a part of why Insmed met with Jaffray. Maybe a partnership too. I guess we will see.....where is Pianoman by the way

    Sentiment: Buy

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    • I have been trying to make sense of his valuation. If Insmed moves their IP to Ireland, they would pay zero taxes in licensing revenue and write-offs of capital costs for some development. To bump the valuation to where he did, that would mean quite a chunk from licensing expected and/or major capital cost write-off from major development.


    • Justarook, what peak Arikace user number are you basing your valuation of $4 billion on?

      • 1 Reply to insmview
      • INSMview, I didn't use the patient numbers as they would be speculative and there could be many other uses of Arikayce (potential). What I take into account is the losses carried forward which would reduce the tax burden for a period of time. I also am more conservative but I put a "number" on each part of the package. For example, for NTM I took $40/share, for Patents (exclusivity 15 yrs worth) I took $10/shr, IPLEX $10/shr, CF in Europe and Canada and Japan ($30/shr) and tax losses (and future potential WAG) $10/shr. I like how FUD and JAD have calculated using patients and so have all the Analysts except Wedbush. I know this is not scientific but we don't need another number cruncher. All of the above have to be taken into account when assessing value and some are more speculative in arriving at FMV.

        Sentiment: Buy

    • Assuming NTM is approved in both the US and EU - and this giving approval to countries globally - what is the global market and what is the value of a treatment regimen. My understanding is that the global market is around 350,000. 1/3 market penetration would be around 100,000 per year. If the treatment regimen is $16,000 x 4 cycles it equates to about $64,000 per patient or close to $6,4 billion in revenues. If market penetration is half of this and treatment is half, this still yields $1.6 billion per year. Add in CF and possibly another $400 million annually, or around $2 billion. Net present value would take this down to around $1.4 billion with an additional $$300 million net present value for Iplex and short stature. $1.7 billion x 6 (average biotech multiple) equates to around a $10 billion valuation, or $250 per share. I believe that, by yearend this will be the net present value.

      Sentiment: Strong Buy

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