Blockbustering8 May 2025 15:49
Assuming Bex will be a blockbuster with 1B$ annual sales through a partnership. Assuming royalties were 20%, Faron would make 200m$ annual sales. That would mostly be pure earnings. With a profit rate of 75 % the earnings were 150m$ and the costs were 50m$ annually. Only a super talent can burn that much of money (meaning investing a lot for the additional indications in the pipeline).
Earnings like 150m$ with a very traditional P/E ratio 18 would make a valuation of 2,7B$ (with the additional high future expectations for solid indications etc the P/E could be 50 or 70 etc..)
In case there are annually 20000 new MDS cases in big5 European countries and an other 20000 in US (pricing 100000$ - 250000$ per patient per annum). This would make with 100000$ per patient per annum total sales of 4B$ annual sales. With the P/E 18 the valuation would be 10,8B$. And again with higher future expectations through other indications like solid ones the P/E could be many fold.
And from an other perspective assuming that if Bex makes 200m$ for Faron, the rest of the 1B$ sales would yield at least the same 200m$ as a profit per annum for the partner company (meaning the partner would burn 600m$ a year - must be very talent people). So if adding the partner company’s MDS Bex profit of 200m$ to the Faron’s profit of 150m$, that makes 350m$ earnings for MDS Bex per annum. Keeping that in mind the value of Bex business should be 6,3B$ when it reaches the status of a blockbuster sales of 1B$. So I guess 6,3B$ would be the minimum price for an M&A with regard to MDS, even before it reaches the first B.
The above figures were played only with the potential of MDS.
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