Botanix Pharmaceuticals Limited

ASX:BOT

Botanix Pharmaceuticals Limited

ASX:BOT
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$0.380 (+4.1%)
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#5
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48
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Reports (2) My Report Forum Investors
Forum Topics BOT BOT Bull Case

Pinned straw:
NewbieHK
Added 7 months ago

I think the Euros Hartley report is extremely conservative.

Let me preface this with the fact I hold.

If we consider the insurance coverage (meaning significantly higher $$$), the ability to advertise (market) broadly, the ability to use tele-medicine for repeat scripts and the size difference of the market in the US we can assume growth and its use will be faster than Japan.

I am wondering if EH simply didn’t want to publish figures that even had me repeating my calculations because it just seemed to unbelievable.

Of course one needs to temper their enthusiasm, but even using a ridiculously low 5000 sufferers x 12 monthly supplies at $500 USD/m = 30m USD in sales.

With millions of sufferers and BOT providing a viable alternative to current treatment methods it’s hard to believe the target revenue / profit timelines will not he brought significantly forward.

The FDA June announcement will be an interesting one to watch. A positive announcement de-risks the stock and might open the flood gates to significant price appreciation.

Until then speculating makes for interesting times.

mikebrisy
Added 7 months ago

@NewbieHK I agree. When I ran my numbers yesterday and came up with a valuation of 4X the SP, it caused me to check my calcs 3 or 4 times. But the numbers are what they are.

I don’t see how EH got their low number. It’s almost as if they’ve said, “we think it will ramp up 30% before approval, so that’s the number.”

It is unusual to see an 9 year EBIT profile that then leads to such a low ball TP.

In any event, this one is going to be an “interesting” hold.

12
conrad
Added 7 months ago

@mikebrisy maybe the SP target is for the day prior to FDA decision? I also expected a higher target which took into account the (fairly small) risk of further delays

Strange, as EH were not shy to predict a SP multiple times higher than (at the time) the current SP in their older reports.

https://botanixpharma.com/wp-content/uploads/BOT.ASX-FDA-New-Drug-Application-NDA-Formally-under-review-120822.pdf


9
conrad
Added 7 months ago

Looks like the $0.33 Euroz target was a “risked” forecast.

“Using our conservative forecasts, our risked (10%) Sofdra NPV13 valuation is $0.33/sh; unrisked (post FDA approval) with an NPV10 it increases to $0.41/sh.”

The report linked below outlines 4 scenarios with progressively higher price targets.

BOT : Unpacking the Blue Sky

I’m not sure why all their assumptions begin with what seems to be an arbitrary 1% US market penetration by 2033. Reversing their logic to calculate Japan market penetration gives me 2.09% in year 4 of sales.

  • Japan sales @ year 4 = 350,000 units
  • US / Japan population ratio = 2.66
  • Estimated total Japan patients = 1.391M
  • Estimated Japanese customers (units sold / 12) = 29,167


I don’t particularly like the conversion of total sales divided by 12 to come up with number of customers either, not sure if there is data to back this up? Would be a lot easier if they said: 350,000 units sold in Japan during year 4, US population is 2.66 times larger so we estimate 931,000 units will be sold in the US in year 4.

Very rough calculations I know, and there are/will be many differences in the two markets (unit price being the main one) but at least it’s based on something tangible.

13
mikebrisy
Added 7 months ago

@conrad, to me it looks like they set out 4 scenarios, which are really only two scenarios with two discount rates for each. But then only picked the lower market scenario with the higher discount rate to arrive at the target valuation.

They comment that the comparison to Japan of 1% is conservative.

They might have argued that uptake in the US could be lower because the US price is so much higher, but pricing has been tested and it is the payers that will pick up much of the tab. So I have assumed the $BOT folk know what they are doing on pricing, given the experience of the team.

Anyway, I’m all set and less than 4 weeks for news one way or another. Should we pass approval, I’m assuming there will be more coverage, and all talk of $0.33 will be consigned to history.

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