Whilst researching potential valuations I came across the name “Joseph Edelman”, portfolio manager at Perceptive Advisors and apparently widely regarded as the greatest biotech investor of all time.
So he typically places a 3 x peak sales multiple on potential drug candidates although in some cases he has applied multiples of 6x or more.
So I know and we all know MEDs projected peak sales amount to a billion dollars. If we assume 500 million dollars for now and just use a multiple of 3, this means if it’s sold off it should command 1.5 billion dollars .
If we discount this further by only assuming a multiple of 2, we get a billion dollars.
Surely not???Dare we dream??