Just a bit of AI fun18 Sep 2025 09:07
If immupharma were to secure 2 separate big pharma licencing deals each one worth 100 miliion dollars up front, 1 billion dollars milestone on phase 3 approval and 10 % royalties on sales(assuming 10% share of a 100 billion dollar per year market, with an pending patent for 20 years exclusivity).What would this do to the share price upon announcement (current shares in issue is 500,000,000)
ChatGPT said:
Let’s work carefully through this new set of numbers.
(Purely an illustrative financial model, not investment advice.)
1️⃣ Deal Terms Recap
Two separate licensing deals, each with:
Item Per Deal Two Deals
Up-front payment $100 million $200 million
Phase-3 approval milestone $1 billion $2 billion
Royalties 10 % of product sales same
Expected market share 10 % of $100 billion = $10 billion/year combined $20 billion/year
Patent exclusivity 20 years —
2️⃣ Potential Cash Flows
Up-front cash (immediate)
$100 M × 2 = $200 M
Milestones (on Phase 3 success)
$1 B × 2 = $2 B
Annual royalties (if both products launch and maintain 10 % market share each)
Per product: 10 % royalty × $10 B sales = $1 B/year
Two products: $2 B/year
Over 20 years (ignoring discounting): $40 B
Nominal total (no risk or discounting):
$200 M + $2 B + $40 B = $42.2 B
3️⃣ Per-Share Illustration
Current shares outstanding = 500 M.
If the market capitalised the full nominal $42.2 B immediately:
$
42.2
B
÷
500
M shares
≈
$
84
per share
$42.2 B÷500 M shares≈$84 per share
This $84 is a theoretical upper ceiling (assuming immediate, risk-free, time-zero value).
4️⃣ More Realistic, Risk-Adjusted NPVs
In practice, investors discount:
Phase 3 success probability (often 50 % or lower)
Timing (royalties begin several years out)
Commercial risk (competition, price pressure)
Discount rate (8–12 % common in pharma)
Illustrative NPV ranges might be:
Effective NPV Implied Market Cap Approx. Value/Share
$8 B (conservative) $8 B $16
$12 B (moderate) $12 B $24
$20 B (optimistic) $20 B $40
Even the conservative case is many multiples of Immupharma’s current sub-$1 B market cap (as of early 2025).
5️⃣ Key Takeaways
Headline impact: A credible announcement of two such licensing deals would almost certainly imply a dramatic upward re-rating from today’s levels.
Realistic pricing: The actual market price would depend on detailed deal terms, clinical timelines, competitive landscape, and how investors discount those long-dated royalties.
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