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Message: Looking for some input to pricing model for this stock based upon approval
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Be gentle with me when you read this, this is a fist attempt at doing this publicly. Keep in mind I am looking for feedback on how to improve the model.

Synopsis:

At 1 % market penetraction in at the end of yr 1 based upon a P/E of 10 should have us priced at 2.60(ish) at date of FDA decision (think this to be an extremely lowball).

Following the market penetration to end of FY 10 and bringing back all dividends and calulcated share price back to FDA date has us closer to 327 per share, or based upon the dividends and share price closer to 668.

If I can figure out how to post this workbook I will, or in lieu send me your numbers and I'll reproduce the model.

Comments to the undersigned,

OOG

______________________________________________________________________

Inputs are found below.

Output:

Year Mrkt Size Penetration Mrkt Shr Contribution EBITD Tax Credits Taxes Debt Service Reinvestment Net to Shrhlds Share Count Net Earnings / share Share on P/E Share on Div at: 0.04 4% 4%
1 70000000 1% 350000 1200 420,000,000 100,000,000 26,000,000 125,000,000 134,500,000 134,500,000 500000000 0.27 2.69 6.73 0.27 0.26
2 70000000 1% 700000 1200 840,000,000 113,450,000 138,550,000 125,000,000 288,225,000 288,225,000 500000000 1.68 16.80 42.00 1.96 1.55
3 70000000 2% 1400000 1200 1,680,000,000 142,272,500 361,727,500 125,000,000 596,636,250 596,636,250 500000000 3.36 33.60 84.00 5.40 2.99
4 70000000 4% 2800000 1200 3,360,000,000 201,936,125 806,063,875 125,000,000 971,574,450 1,457,361,675 500000000 6.72 67.20 168.00 12.33 5.74
5 70000000 6% 4200000 1200 5,040,000,000 299,093,570 1,212,906,430 1,148,128,071 2,678,965,499 500000000 10.08 100.80 252.00 22.91 8.29
6 70000000 8% 5600000 1200 6,720,000,000 413,906,377 1,602,093,623 1,023,581,275 4,094,325,102 500000000 13.44 134.40 336.00 37.26 10.62
7 70000000 10% 7000000 1200 8,400,000,000 516,264,505 2,003,735,495 639,626,450 5,756,638,054 500000000 16.80 168.00 420.00 55.55 12.77
8 70000000 13% 9100000 1200 10,920,000,000 580,227,150 2,695,772,850 822,422,715 7,401,804,435 500000000 21.84 218.40 546.00 79.62 15.96
9 70000000 17% 11900000 1200 14,280,000,000 662,469,421 3,621,530,579 1,065,846,942 9,592,622,479 500000000 28.56 285.60 714.00 111.36 20.07
10 70000000 20% 14000000 1200 16,800,000,000 769,054,115 4,270,945,885 1,252,905,412 11,276,148,704 500000000 33.60 336.00 840.00 149.42 22.70
485.42
PV of FV PV
Present Value of share based upon Dividend 327.93 668.41

Inputs:

Variable Model 1
Share Count 500M 500000000
Outstanding Debt: $500M ??? 500000000
Partner: none, Mr Mann takes is via the share count 0%
10 year market protection (patents) 10
Annual Cost of treatment: $2200 2200
Contribution Margin per patient: $1000 1000
Market Size 40M NA + 30M Euro + Remainder (currently negating)
North America 40000000
Euro 30000000
Others 0
Total Market 70000000
Simple Tax Rate 30% 30%
Tax Right offs of $1B 1000000000
Dividend Rate 4% (probably better to roll it over on Build out) 4%
Pharma P/E ratio: 10X ??? 10
Market Penetration Years 1-10 (1%,2%,3%,4%,6%,10%,15%,20%,25%,30%) just guessing though, but thats why I love spread sheets.
Y1 1%
Y2 1%
Y3 2%
Y4 4%
Y5 6%
Y6 8%
Y7 10%
Y8 13%
Y9 17%
Y10 20%
Rate of Reinvestment for build out year 1-5: 50%???
Y1 50%
Y2 50%
Y3 50%
Y4 40%
Y5 30%
Y6 20%
Y7 10%
Y8 10%
Y9 10%
Y10 10%
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