Aug. 20 at 6:24 PM
$ABVX added to my leap spread here today. Smaller more speculative position, not because I don't believe in the drug or the trial results, but because I always place biotech in the speculative bucket, even if its say
$ABBV or
$LLY who are fantastic. Just the nature of the beast.
That being said, I ran an extremely conservative DCF model on analyst "peak valuation" for UC indication with these stellar results in a pill and I get a fair market value of 17bn. Makes sense why this is where the LLY rumor for buyout came in at as well. And, I am completely discounting Crohn's at zero, which to be quite honest, the CEO very likely has a 17bn deal in hand, but he doesn't want to do what I'm doing and completely discount Crohn's , but buyers might want data.
To be fair, if Crohn's data hit and is a win, ABVX goes up to 25bn in value, if it missed, we are still at 17bn, so my guess is the CEO is trying to get buyers to pay up for the Crohn's disease "unknown".
