Jul. 16 at 12:15 PM
$VTYX Valuation Case Supporting a
$20–30 B Bidding Contest
Key Takeaway:
Under realistic peak‐sales multiples and conservative risk adjustments, a semaglutide + VTX3232 combination with a broad oxidative‐stress indication set and
$1 trillion TAM can produce an enterprise‐value (EV) in the
$20–30 billion range for early‐clinical assets—making a
$20–30 billion bidding contest entirely plausible.
1. Addressable Market and Peak Sales
• Total Addressable Market (TAM): Aggregating diabetes, cardiovascular, neurodegenerative, oncology, COPD, and related oxidative‐stress indications yields a TAM approaching
$1 trillion by the early 2030s.
• Target Peak Sales Capture: Even a modest 5 percent market share implies
$50 billion in peak annual sales.
2. Applying Biotech Peak-Sales Multiples
Practitioner surveys and deal precedents show that late preclinical/early clinical assets often trade at 5×–10× projected peak sales[1][2]:
Stage
Typical Peak-Sales Multiple
Preclinical/Phase 1
5×–7×
Phase 2
7×–10×
Applying a 5× multiple to
$50 billion peak sales yields an undiscounted EV of
$250 billion.
3. Risk Adjustment (Probability of Success)
Early‐clinical assets carry substantial development risk. Conservative probability‐of‐success (PoS) assumptions:
• Phase 1 → 2: 10–20 percent PoS
• Phase 2 → 3: 20–40 percent PoS
Assuming a mid-range 20 percent PoS yields a risk‐adjusted EV:
4. Upfront vs. Total Deal Value
Biotech M&A structures typically allocate 40–60 percent of total EV as upfront consideration, with the balance in milestones[3]:
• Upfront:
$20 B–
$30 B
• Milestones: Additional
$20 B–
$30 B upon clinical and commercial milestones
This aligns exactly with a
$20–30 billion upfront bidding contest, with total deal value potentially reaching
$50 billion or more once milestones are included.
5. Comparative Deal Precedents
• Alpine Immune Sciences (Vertex,
$4.9 B): Phase 1/2 asset with
$5 B peak sales traded at ~1× peak sales; risk‐adjusted EV ~
$1 B[4].
• Regulus Therapeutics (Novartis, up to
$1.7 B): Preclinical RNAi asset, 108 percent premium; multiple ≈1.5× peak sales milestone structure[5].
By contrast, a first‐in-class oxido-metabolic CNS/GLP-1 combo commanding best-in-class efficacy justifies multiples at the higher end (5–10×) for large targets.
Conclusion:
Even under conservative assumptions—5 percent peak-sales share of a
$1 trillion TAM, a 5× peak-sales multiple, and 20 percent PoS—the risk-adjusted EV of the combination product is
$50 billion, with
$20–30 billion likely allocated as upfront consideration in a competitive auction.
This fully supports the plausibility of a
$20–30 billion ending value for the bidding contest.
“I own shares of the Company and may buy or sell shares at any time without prior notice. This statement is not a recommendation to buy or sell securities and reflects my personal investment decisions.”
