What is Dendreon Really worth>?

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Anonymous

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Any clue what Dendreon can fetch for Provenge and its facilities at the upcoming auction?
Do many bios want what Dendreon has? If so what is fair value of the drug, phase II trials, IP, facilities etc?

Any idea? I have seen $900M thrown around which is based on 3x annual sales?
Any logic in this train of thought?

Thanks
 
No logic whatsoever. People who can't analyze financial statements look for easy metrics they can calculate, like multiples of sales. Even then 3X is a bit high since the value of most established products are a bit closer to 2X. Even so, the fallacy here is that you cannot look across an entire industry like pharmaceuticals and compare sales multiples unless you also compare profitability, asset intensity, and cash flow. If Provenge were a typical pharma product, it would sport a gross margin of 80% plus and an operating profit before tax in the range of 15-20% of sales in which case 2-3X sales might be a reasonable estimate of value, but it doesn't share those other metrics so comparisons based on sales are nearly meaningless. You have to dig a little deeper to discover the value.

The company doesn't OWN its facilities, so they can't sell them. The leases are assumable if a buyer wants them, and the residual lease payments and restoration costs are a bankruptcy liability if the buyer doesn't want them. The manufacturing equipment in Atlanta is all part of the facility lease so that can't be sold either. IP has no value separate from the product opportunities it protects, so the value of a patent is pretty much the value of the drug. Most Phase II products don't reach market so while there may be some value there, buyers will put a big discount on it.

So it really comes down to what the Provenge franchise is worth. Fact is, the company was shopped in the autumn of 2013. Forty companies looked at the offering information, a few did further diligence, and zero companies made a bid. In the meantime, Zytiga and Xtandi have gained huge market traction. For most of 2014 Dendreon could have been bought (including debt retirement) for around $1 billion so if any of the tire kickers from the autumn 2013 auction had just wanted a lower price, the market gave them one but still there were no takers.

I think $900 million is a pipe dream and even reaching the auction reserve price of $275 million is going to be a stretch. It is a sad ending for an innovative product, but not all good science is good business.
 
I think you can expect a fair valuation of $750m. Whoever get the final bid will also get all assets without ANY liabilities. Also consider the $2 bill in NOL'S that can be immediately applied to the successful bidder. There is value there as well.

I wonder why soros still holds his shares? Wonder if he's got a trick up his sleeve.
 
The Yahoo pumpers have invaded this board. Please go back to your zoo where logic has no meaning. They really think Soros has never lost money in any investment. They even wrote emails to Senator Warren as if she is going to do something about the bankruptcy. Foolishness at its best.
 
Anonymous said:
I think you can expect a fair valuation of $750m. Whoever get the final bid will also get all assets without ANY liabilities. Also consider the $2 bill in NOL'S that can be immediately applied to the successful bidder. There is value there as well.

I wonder why soros still holds his shares? Wonder if he's got a trick up his sleeve.
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Wow! YOU'RE FREAKIN' DELUSIONAL. There will be no bid, except that of the biggest current creditor Deerfield, for the tidy price of the sum they already have in it, $150M. If this POS could've sold for $900M in the last three years it would have under Johnson. The problem was, prior to BK, it wasn't valued at a THIRD of that figure. After BK, without the debt, it's STILL a bust, bc doctors have walked away from it. Over. Done. Kaput. Hear me? GAME OVER.
 
850 million to 1.2 billion. Den managed to pull 300+ million, value will not be based on this alone, Europe is now in full swing. 500-750 million revenues will be based and reflected on this ultimate selling price in my opinion.
Also, competition doesn't want the competitor gaining advantage which may result to huger prices and bids as well.
Pay little attention to these sluggish reps here who have been laid off lol
 
Anonymous said:
850 million to 1.2 billion. Den managed to pull 300+ million, value will not be based on this alone, Europe is now in full swing. 500-750 million revenues will be based and reflected on this ultimate selling price in my opinion.
Also, competition doesn't want the competitor gaining advantage which may result to huger prices and bids as well.
Pay little attention to these sluggish reps here who have been laid off lol
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Europe saves nothing. Provenge is a $ driven product. Docs in the US don't make squat prescribing chemo pills, but can make boatloads by infusing Provenge in the office. And yet they still overwhelmingly use the pills. Hmmm.

In Europe they'll make even less on Provenge, so it's one CLEAR advantage in the market place, either clinical or financial, evaporates like a fart in the wind.

Hold on to that thought for a second , though...

Do you really think that ANY large pharma company would spend even $300M on a product FOUR years post launch that's STILL in the red?!?! That money would be more effectively spent toward L&A or M&A with a biotech of equal size to Dendreon that has a whole RANGE of promising drugs in Phase TWO, much less without the logistical and financial overhead of such a "hands on" product.

So, tell us again about Europe being in full swing in three months, when the US still isn't after 4 years, and why the acquisition of Dendreon wouldn't be a career-crushing blow to any CEO's tenure in light of all the red flags waived prior. We'll be eagerly waiting your irrational reply...
 
Nobody can argue that 500 million is extremely doable and valuation will not be based on Dendreon's incompetent hands. Science in the wrong hands here, yet in the right hands this is definitely a billion dollar co.
 
Anonymous said:
Hold on to that thought for a second , though...
QUOTE]

Wait! How do you hold onto a fart in the wind, even for a second?

I have to agree with your general thesis though, even if Dendreon sold lock, stock, and barrel for $1 it would still be an outsized risk and operational distraction for any buyer. Having worked in a Fortune 100 healthcare company at the highest level, I can promise you that the executives are at least as concerned about the optics of a deal than they are about the realities.

In an industry with 90% gross margins for on-patent products, addition of Provenge would reduce overall corporate profitability measures while adding little to the sales numbers ($300 million, even if it could be doubled, is still a rounding error for a Big Pharma). Declining average profit margins and slower sales growth is enough to get the CEO fired in many cases. Being remembered as the moron that acquired Provenge is not the best way to end an otherwise stellar career.
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Anonymous said:
Nobody can argue that 500 million is extremely doable and valuation will not be based on Dendreon's incompetent hands. Science in the wrong hands here, yet in the right hands this is definitely a billion dollar co.
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99% of people with any common sense would argue that the asking price of $275M ISN'T DOABLE, genius. 95% would argue $175M isn't doable. Are you insane to think $500M passes any sort of sniff test?!? If $500M was even actionable it would've been done over a year ago, novice.
 
Anonymous said:
Europe saves nothing. Provenge is a $ driven product. Docs in the US don't make squat prescribing chemo pills, but can make boatloads by infusing Provenge in the office. And yet they still overwhelmingly use the pills. Hmmm.

In Europe they'll make even less on Provenge, so it's one CLEAR advantage in the market place, either clinical or financial, evaporates like a fart in the wind.

Hold on to that thought for a second , though...

Do you really think that ANY large pharma company would spend even $300M on a product FOUR years post launch that's STILL in the red?!?! That money would be more effectively spent toward L&A or M&A with a biotech of equal size to Dendreon that has a whole RANGE of promising drugs in Phase TWO, much less without the logistical and financial overhead of such a "hands on" product.

So, tell us again about Europe being in full swing in three months, when the US still isn't after 4 years, and why the acquisition of Dendreon wouldn't be a career-crushing blow to any CEO's tenure in light of all the red flags waived prior. We'll be eagerly waiting your irrational reply...
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Well , 1st bid just released at 296 million fool.
 
"Well , 1st bid just released at 296 million fool."

This is a funny thread. What we have here is the collective wisdom of a parade of know-it-alls who haven't got a clue. 296 million is the floor, soon to be going up.
 
All of the posts are sad. As an investor when there was promise, I am so sad to see where this company has gone. Whatbis more maddening is to see many pictures on Facebook pages of the sales force having a wonderful time in Santa Barbara at a spa for their ? Last sales meeting? Wasting money for a funeral??
 
Anonymous said:
"Well , 1st bid just released at 296 million fool."

This is a funny thread. What we have here is the collective wisdom of a parade of know-it-alls who haven't got a clue. 296 million is the floor, soon to be going up.
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it's bottom feeding Valeant that bid. After the Allergan debacle, did you confuse them for having common sense? This is going to be a disaster. No more bids coming. No company worse than Valeant has the cash to waste, and any better company is wise to stay away. Stop pumping this garbage. It's only going to break your heart...
 
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