Re: Und auchn das, bittschön:

verfasst von Lullaby, 19.11.2000, 10:14

Vertex Pharmaceuticals Inc (LONG-TERM BUY)
DOWNGRADING TO LONG-TERM BUY
CURRENT PRICE DISCOUNTS NEAR-TERM BEST-CASE ASSUMPTIONS


· Downgrading Vertex to a long-term buy from a buy
· Current stock price is approximately 150 times our forecast 2005 EPS of $1.85,
discounted at a risk rate of 30%
· Expect one more multi-target collaboration in the next 6 months, though the size is likely
to be much smaller than the recent $800 million kinase deal with Novartis
· The bulk of the important clinical news flow is expected in 2H/01 and beyond

We would use market volatility to opportunistically build a position in the stock, with our
sights set on the second half of 2001 and beyond for significant clinical news flow.

INVESTMENT THESIS:

In March 2000, we upgraded shares of Vertex to a Buy (at a price of $32.50) based on
expected positive clinical developments in its hepatitis C program and potential new
collaborations. Since that time, Vertex announced a transforming $800 million
collaboration with Novartis, validating its chemogenomics approach to parallel drug
discovery, and providing the resources for a major R&D expansion. The impact of this
collaboration will be a growing pipeline of new drugs for many years to come, in our
opinion. Over the next six months, we expect one more collaboration, though significantly
smaller than the Novartis deal. We also expect several clinical programs to enter more
advanced clinical testing. However, we do not expect significant clinical results in the
near-term, and at its current price we believe success is already assumed for most
programs.

Near-term volatility is likely to reflect market conditions more than fundamental events in
the company. We believe the best investment strategy is to keep Vertex on the buy list but to be disciplined and price sensitive,
buying on significant dips with a long-term outlook. We view Vertex as a core biotechnology holding, with real long-term staying
power. However, over the near-term, recent price appreciation has already discounted our positive outlook for clinical success in
our view.


Ja, ja. Mit Abzinsung rechnen, ist eh nicht jedermanns Sache.


VALUATION:

Sales Assumptions:
Though valuation analysis is currently out of vogue for development-stage biotechnology companies, we believe it remains
important to understand the underlying assumptions that are implicit in Vertex’s current stock price. We forecast EPS of $1.85 in
2005 driven by sales of five drugs in three major product categories: HIV, hepatitis C, and rheumatoid arthritis (Table 2). In our
model we assume that Vertex partners VX-497 for the treatment of hepatitis C infection (following demonstration of efficacy) and
retains 25% of the economics. For VX-745, we assume that Vertex takes the drug to market itself. In total we forecast $720 million
in product sales in 2005, generating revenues of $258 million. In addition, we forecast $90 million in collaborative R&D revenue
of which $40 million is assumed to be currently committed.

PEG Analysis:

The current stock price of $97 implies a 150 P/E applied to our 2005 forecast of $1.85, discounted at a rate of 30% for 4 periods
(Table 3). A P/E of 150 is a PEG of 3 to 5, if we assume that Vertex will experience rapid top-line growth in 2005 that could
support 30% to 50% EPS growth. A PEG ratio of 3 to 5 is far in excess of the 2.56 PEG of profitable biotechnology companies.

Ach ja, wo sind die 97 $ hin. Ja wo sind die den bloß?


Sensitivity Analysis:
There are three components of our valuation - EPS, P/E, and discount rate. The current stock price of $97 implies a 150 P/E
applied to our 2005 forecast of $1.85 discounted at a rate of 30% for 4 periods. If we assume a more reasonable P/E of 100 (PEG
of 2 to 3 on 30% to 50% EPS growth), we would need to increase our EPS forecast by approximately $0.93 per share or lower our
discount rate to 17.5% (an unreasonably low rate for a company with significant clinical risk). A discount rate of 30% is
appropriate in our opinion for a development-stage biotechnology company with its most significant products in Phase II trials. A
$0.93 increase in 2005 EPS could be achieved with $100 million in additional VX-745 sales. Larger sales increases would be
necessary for the other royalty-bearing products. Alternatively, Vertex could add $0.93 to forecast 2005 EPS by generating an
additional $60 million in net collaborative R&D.

(J.P. Morgan Securities Inc. acted as co- or lead-manager in an offering of securities for DNA and VRTX within the past three
years. The analyst or research associate holds a position in AMGN, DNA, and VRTX.)

Und außerdem: Was für ein Markt soll denn das sein? Glaubt jemand im Ernst dass mit HIV- und/oder Hepatitis-Mitteln was zu reißen wäre? Potentielle Umsätze viel zu mager. Welche Drugs machen denn schon mehr als eine Mrd. Umsatz?

Wellness-Drugs sind die Masche. Um die wirklich Kranken kümmern sich doch nur noch Idealisten.

Gruß

L.


<center>

<HR>

</center>

Thread gesperrt

 

gesamter Thread:

• Topp, die Wette gilt - sumima, 18.11.2000, 21:31
  • Re: Topp, die Wette gilt - JüKü, 18.11.2000, 21:36
    • Re: Topp, die Wette gilt / ABER... - JüKü, 18.11.2000, 21:37
      • 90? (owT) - lentas, 18.11.2000, 21:39
    • Wetten das....? mkT - Das Orakel, 18.11.2000, 22:08
      • Re: Wetten das....? mkT - JüKü, 18.11.2000, 22:14
        • Re: Wetten das....? mkT - Das Orakel, 18.11.2000, 23:52
          • Re: Wetten das....? mkT - JüKü, 19.11.2000, 00:17
            • Erklärung.... - Das Orakel, 19.11.2000, 02:22
      • Re: Wetten das....? Vertex / Logo - Toni, 18.11.2000, 22:39
        • Re: Wetten das....? Vertex / Logo / Toni - JüKü, 18.11.2000, 22:55
          • Re: Vertex / Logo - peinlich - LOL - Toni, 18.11.2000, 23:19
            • Vertex - LogoAnalysen... - Das Orakel, 19.11.2000, 02:13
        • Vertex / Logo? LOL - Mitnichten.... - Das Orakel, 18.11.2000, 22:56
          • Re: Vertex / Logo? LOL - Mitnichten.... - JüKü, 18.11.2000, 23:09
            • Re: Vertex / Logo? LOL - Mitnichten.... - Das Orakel, 19.11.2000, 00:32
            • Re: Vertex / Logo? LOL - Mitnichten.... So, so... - Lullaby, 19.11.2000, 10:06
            • Re: Und auchn das, bittschön: - Lullaby, 19.11.2000, 10:14
            • An from the horses mouht: - Lullaby, 19.11.2000, 10:22
              • Re: @Orakel - Jetzt hat Dich der Lullaby auch grad noch"erschlagen" (owT) - Toni, 19.11.2000, 11:19
          • Re: Vertex / Logo? LOL - Mitnichten.... - Toni, 19.11.2000, 11:15
  • @sumima: Siemens-Kursdaten - Uwe, 18.11.2000, 22:29
    • @Uwe, danke - Import o.k., aber.-Konvertierung kapiere ich nicht - sumima, 18.11.2000, 22:48
      • Re: @Uwe, danke - Import o.k., aber.-Konvertierung kapiere ich nicht - Uwe, 18.11.2000, 23:54
    • @Uwe - Kursdaten - Sascha, 19.11.2000, 17:35
      • OI = Open Interest = Anzahl offener (ausstehender) Kontrakte (Fut./Opt. only)owT - Tobias, 19.11.2000, 17:43
  • Siemens - meine EW-Zählung lautet: - sumima, 19.11.2000, 20:04
    • Re: Siemens und andere - ASCII-Datenreihen: Kurse im Textformat - Uwe, 19.11.2000, 20:35