Startups don't take baby steps when they go from having nothing, to having something
Take
https://www.neurenpharma.com/They had their 1 product FDA approved in March 2023.
6,000 - 9,000 total sufferers in the USA.
Price is
375,000 US annually
DAYBUE™ Q1 2024 net sales US$75.9 million,
full-year guidance US$370-420 millionor approximately 1000 patients, which is 11 to 16% market penetration within 15 months of approval.
Now also consider, that australian startup does not sell in the USA directly, they partnerted so the other company recieves the US 370-420 million.
Neuren recieve a royalty of 12% in that ( 370 - 420 million ) band.
So around 44 million re-occurring royalty.
If they get to say 80% market penetration, then the figure would be closer to $250 million USD re-ocurring at peak.
Yes it's a different product,
Yes unmet need is higher ( would be 7 out of 7 ) , although according to botanix research patient and dermatologist unmet need was 6 out of 7, so we are not completely in a different ballpark
Botanix are not recieving a royalty, they are paying a 5% royalty, so profit margins would be much greater compared to revenue sales.
Ie -
Daybue sells 400 million, neuron recieves 44 milion
Botanix sells 400 million, botanix recieves ( estimated ) 200 million ( based on 12 month 700 USD/month perscription, 50% total cost of goods )
Daybue 80% market penetration recieves ( on label ) about 270 million.
Botanix 1% market pentration recieves ( estimated ) 154 million ( 12 month perscription for 1% of those who saw doctors for treatment )
You can see that Botanix's 2% market penetration, is more than 100% pentration for Neuron.
BOTANIX 80% market penetration about 12.5 Billion in sales.
Neuren pharma now is priced at 2.4 billionAUD , and they only get around 44 million USD re-ocurring for royalties.
PE around 36...... CSL's PE is also around 36 currently...... intereting..... very, very interesting.......... the ratio is excluding 1 off non re-curring payments that may or may not happen, and is based on Neren's long term re-occurring expected royalties.
If BOT even matches what Kraken did in year 2 in Japan, and manages to get 1% of market.
PE of 36 ( just like Neuron ) .... ( just like CSL ) ........ with 1% sales, or 234 AUD million, gives a market cap of 8.4 Billion........ or in other words ........
TWENTY TIMES THE CURRENT SHARE PRICE.$5.60 AUD
ALL I have done is take the Neuren royalty ( ignoring the one off payments ), and used the same PE as them and CSL..... that would give you the share price above.
Now if we actually want to get ridiculous.... lets say Neren's 80% market penetration, is Botanix's 20% market penetration. Both could happen.
20% is 740,000 out of those who sent to seek medical treatment.
That is 3.1 Billion in estimated revenue, PE 36 ( like CSL and Neren long term sales )
Gives a market cap of 111 Billion on 20% market penetration
or share price of $70 AUD.
So yeah.
This ain't going to walk up, and in my opinion is a massive takeover target post approval.
The key here, is approval.
Not possible without approval, which still might not happen.
Once approval has happened, walking no long possible, just comes down to basic math on sales.
You could half Botanix profit and say they only get 25% of the retail price, and the share price on PE 36 would still he $35 AUD.
Massive, massive, massive, massive possibility here. Like CSL before they sold their first product.
(20min delay)
