I have no opinion on the accuracy, but thought I’d throw it out there if people would like to compare assumptions that go into the valuation:

Our fair value estimate for Polynovo is $1.05 per share and assumes the company is profitable from fiscal 2024 onward.

We forecast a five-year group revenue compounded annual growth rate ("CAGR") of 26% forward to fiscal 2028 versus a trailing two-year revenue CAGR of 50%. This is driven by Polynovo’s key US geography where we forecast a five-year revenue CAGR of 21% for the region.

We expect the firm increasing its sales staff to support market share gains. In addition, we expect the recent product launch of NovoSorb MTX to increase penetration within existing hospital accounts given its broader applications. Our forecast five-year revenue CAGR for geographies outside the US is 40%. This is driven by recent entries in India, France, Spain, Canada, and Hong Kong, as well as planned entries into China and Japan. As such, we forecast revenue contribution from the US to drop to 65% of group sales in fiscal 2028 from 79% in fiscal 2023.

On the profitability front, we expect group midcycle operating margins to settle at around 35% by fiscal 2033. We forecast Polynovo’s maiden profit in fiscal 2024 and margin expansion from operating leverage. Our estimates deliver EPS growth of 18% at midcycle. We forecast average annual capital expenditures of roughly AUD 6 million over the next 10 years, or 3% of group sales. We also factor $25 million in capital expenditure over fiscal 2025 and fiscal 2026 to fund a new manufacturing facility which has capacity to service an additional AUD 500 million in annual sales

The other problem is the risk associated with a single large purchaser: the BARDA group sponsoring all their trial sales. 

60% of sales are through this outlet. 

And if the next trial is less rosey.......

The difficulty I have with this company is the limited TAM. It’s an expensive product targeted at a specific market - large tissue defects. 

The most common clinical cause is burns. These are decreasing in frequency and severity everywhere in the advanced world - which is the only market that can afford their market.

heroic surgery is the other reason patients might have large soft tissue defects. However, once again, free flaps and grafting techniques are now widespread and advances in chemo immunity and radiotherapy make such procedures less common. 

There any well be an opportunity to capture a majority of a small but expensive market. But it isn’t growing