Pinned valuation:
21 May 2024 - Bull Case (SOFDRA now approved)
Updating the valuation based on the 14th May assumptions, now with Sofdra approved, as follows.
SOI now 1,575+233, and allowing for further dilution due to share options to 2029, giving assumed 2029 SOI=2,000m
No change to 2029 EPS, debt free, and tax rate
Eliminate FDA failure cases and resubmission scenarios
Retain 12% discount rate to reflect market uptake risk.
2029 EPS now $0.055
Gives 2029 values for P/Es 25 & 45 of $1.36 - $2.45
Discount back at 12% to 2024 gives $0.77 - $1.39
Add back in value of $70m cash of capital raised = $0.035/share
Valuation range: $0.81 - $1.43
Central Case $1.12
Which kinda explains the limited SP movement today, versus what might have been expected, given that my pre-approval, undiliuted SP was $1.13.
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14 May 2024 - Bull Case
See today's Straw for full justification.
On the basis that $BOT achieve an EBIT in 2029 of US$104m, carrying no debt, and applying tax at 30% and USD:AUD 0.67 give 2029 NPAT of A$109m.
With 1,575m SOI, although $BOT will be highly cash generative quite soon, I'll allow some dilution due to share based compensation, so assume SOI of 1,800 in 2029.
That gives a 2029 EPS of $0.061.
I'll deal with the uncertainty via the P/E ratio, ranging from 25 to 45 - probably very conservative for a high growth pharma company.
I'll add a risk premium to the WACC, and discount at 12%.
My unrisked valuation range is: $0.88 to $0.1.56 (but including a margin of safety in the risk premium)
So, now I am going to apply my 90% CoS, and assume that in the 10% failure case
Boiling all this up together, and I get a risked valuation of: $1.13
@mikebrisy i know the valuation is primarily based around SOFDRA however, would your valuation change considering the other products (ie BTX 1053 for acne at Phase 3) and the value in Botanix proprietary delivery system?