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The Vedanta $1b valuation is higher than the DealRoom.com valuation of c$550-680m in April 2023 after the financing round completed in that month.
The increase is due to major progress in Vedantas drug pipeline with 4 drugs now in late stage clinical trials ( one in Phase3 and three in Phase2 ) and the improvement in the market for Pharma investment particularly in the US...Note Bristol Myers acquisition of Karuna for $14 billion as an example.
TakeAim
Please see my posts of the 27th and 30th December for answers to your questions with a correction to the reference of Puretech's holding in Vedanta being now 41% not 47% as stated.
Also Puretech has confirmed in its December corporate update ( which you should read in detail)
that it is examining a return of surplus cash to investors by way of a special dividend and or further share buybacks.
Vedanta has raised c $400 m in financing to date from Pfizer, Bristol Myers, Gates Foundation and other large investors and has a valuation of c1billion per Wall Street analysts with an IPO muted for this year or next year.
Just to further elaborate, I am new to the company but my initial impression is the corp presentation and financial reports aren't particularly investor friendly.
For example, normally the NAV value for stakes in unlisted companies (e.g. Vedanta) would be explicit but I can't see them referenced.
Similarly the expected value from the Karuna stake appears quite vague.
From what I can derive so far:
- $292m value in shares
-$400m milestone payments from Royal Pharma deal but exact details unknown other than part of it relates to FDA approval which would seem a formality
- further potential milestone payments and 20% sublicence revenue royalties from Karuna licence. Still relevant after BMS deal?
Lots of unanswered questions but as a result of this apparent lack in transparency, potentially a ridiculously low valuation on a share which will soon have more cash than the market cap.
So what are people expecting the ultimate value from Karuna to be. There are slides in the latest corporate presentation suggesting shares worth $292m held at fair value at year end 23 plus $400m royalties (hence the c$700m total value that is referenced).
Is there anywhere we can explicitly calculate the NAV of the Vedanta stake? It looks like the last funding round was in April and Puretech's share of the company is now c.41% but I can't find anywhere which is completely transparent as to what the latest funding means in terms of implied valuation of PRTC's stake. Anybody know for sure?
I purchased just short of 20,000 on Friday AM at 199p. I've watched Puretech for a long time and thought they were hugely undervalued. The BMS purchase of Karuna was the catalyst for me. It will be approved and that is a huge windfall for Puretech. The biotech sector will come back in a big way this year and vultures will circle Puretech as a takeover target.
I don’t think you’re using the Nasdaq site. I would ignore anyway. Volume nothing like uk even when multiply by 10
Currently up over 11% across the pond.
Ignore Nasdaq as uk market leads on this one. Looked all week and pretty much endless buying even when the markets are down. mms seem happy to move up also
Bought some...intriguing company
Interesting day . puretech announces presenting very soon and that is when we should hear what they are are goign to do with all that lovely money. today buyers in afternoon took price up and met a seller , so high volume. everyone happy , so this should churn around 200p and then move on up in January . what great potential .
Markets are soft today but this sector looks like it’s coming back to life at last.
The macro outlook for Pharma companies has dramatically improved in recent months with large Acquisitions, AI related advances in accelerating research and fast tracking of drug development and the ageing of Western and Chinese populations et al.
We are now becoming aware of the stark undervaluation of Puretech's shares and this anomaly is illustrated further by Puretech's investment in Vedanta Biosciences where it has a 47% shareholding and significant royalties potential.
Vedanta is valued at c$1billion with 4 major drugs at late stage development including one in Phase 3 trial and two in Phase 2 trials.
Vedanta has built state of the art manufacturing facilities near Boston and has raised c$400m in funding from major investors such as Invesco, Bristol Myers, Pfizer, the Gates Foundation.
Analysts are suggesting a potential market valuation of c$3-5billion on successful drug trials and an IPO is being muted for 2024.
So with Puretech's investment plus royalties in Karuna valued at c$1billion plus a potential return of over $1billion in Vedanta plus say $200 m in other founded entities we are up to over $2billion.
Then add Puretech's in house drug programmes including its late stage possible blockbuster Pulmonary Fibrosis( LYT-100) drug plus cash of c$320m and you have an economic value of c$3/4billion or over £10 a share.
Dyphne Zohar say she wanted to create a $10 billion Pharma company way back in 2021 .
She better be careful she is not usurped with an aggressive takeover approach at this crazy market cap.
Happy New Year.
So will January be the start of new instistions buying or old ones selling
Finished up 17.9% at $28.18 (equiv £2.17) on NASDAQ
A nice end to the year, and hopefully we see a steady increase into 2024 and beyond. A special divi would be nice too but I'll settle for the SP reflecting true value.
Happy New Year all.
Agreed. £5-10 should easily be achievable just on the hitherto unrecognised fundamentals which are now beginning to be seen, at long last. Seen the same thing happen countless times with heavily undervalued stocks. One might even begin to suspect the down value trajectory is somehow intentionally orchestrated to facilitate a very profitable upwards rise.
Alwaysone , looking strong again on Nasdaq
Interesting , it has come back down now , but interesting day for puretech , it is startling to move up at long last .
short term we should hear what the board intend to do with the excess cash and also during 2024 trial results.
could easily be at £ 5-10 in 2024
10% currently but let's see how it finishes
https://www.nasdaq.com/market-activity/stocks/prtc
Interesting start to the last day of the year on the other side of the pond. 15 minutes into trading and PRTC is up 23.76% at $29.59.
That's equiv of 233p per share
Looks like £2 is on the cards. Maybe even a new year tip :)
Thank you Dallo for that very succinct yet comprehensively illuminating appraisal. I agree, the current valuation is beyond insane and the company is extremely vulnerable to being taken over at this level. The Bell SP target of over £9.00 is more reflective of fair value and once a beady eyed vulture spots this huge undervaluation it will be swooped down upon and devoured in a feeding frenzy. In which instance we may not get the £9.00 but certainly way, way more than where we are now. As always, it's simply at matter of time and patience.
Mickymix
The main shareholder in Puretech is the massive Invesco Fund Management Group with c23% of the total shares.
Invesco has reduced its shareholding from 34% in the past 3 years due to internal rules relating to Invesco holding major controlling stakes in companies.
The Invesco shareholding is now below the critical 25% level and they appear happy now but still have a huge influence.
I have been in contact with the company about the bizarre market mispricing of Puretech shares given the Economic Value ( EV) is approaching $2billion plus.
Puretech's investment in Karuna alone is potentially above $1billion as follows..$336m from 2.4% shareholding plus $400m from Royalty Pharma on Karuna revenues up to $2billion plus milestone payments of c$10 million on FDA approval plus 2% royalties on revenues above $2billion ( analysts estimate Karuna revenues to hit c$7billion for its Schizophrenia and Dementia drugs giving another possible $100 million annual royalties to Puretech .
Add in Puretech's 47% Investment in Vedanta which is unlisted but based on recent financing rounds from Investors including Pfizer and the Gates Foundation is valued at over $ 1billion.
Not to mention the 2 new Founded companies plus existing Founded companies with a conservative combined valuation of say $200m.
Finally we have Puretech's owned retained in house drugs described as the jewels in crown and potentially blockbusters by Puretech Management.
Oh I nearly forgot Puretech has cash of $330m.
Madness and I told Management that the company is very vulnerable to a takeover at this crazy share price and Market Cap of £500m.
Lastly some brokers like Bell have an SP target of over £9.
I rest my case.
ATB
Couldn't agree more. Cash cows have a tendency to get swallowed up. Cash cows with the added attraction of huge ongoing potentials tend to get gobbled up. The funny thing is, it's almost like people are blind...until they are not, by which time they've missed their chance and are left kicking themselves over how they could have been so blind as to not have seen it. Same with an acquisition. It's not been identified yet but once it is, expect fireworks.
PureTech has US$330m in cash its stake in Karuna is worth US$294m if the FDA approve KarXT they receive another US$500m. So over US$1b in cash alone that’s £3.20 per share. Surely this company will get taken out some time soon
Thanks Snowking
(although we'll only be north of £2 on Wednesday if PRTC holds it's head up on NASDAQ today - The markets are open in the US on Boxing Day)