ARWR Stock Price 1 Year Target Calculator

[Bio Boy Scout]

Hi all,

I have created a 1 Year Price Target Calculator for Arrowhead Pharmaceuticals based on Cantor Fitzgerald's latest numbers and calculations in an Excel spreadsheet.  It allows you to tweak Cantor's numbers, include Asia, adjust the discount rate, and so much more.  Here is the link, I promise that there are NO viruses:

www.dropbox.com/s/cd83z47u3satgum/BioBoyScoutPTCalculator.xlsx?dl=0

It's easy to use, as you can only change a certain set of numbers and it won't let you mess up the remainder of the spreadsheet.  The calculations are done automatically and you can see them in the supported tabs.

This is sure to cause quite a stir in the financial investment community when it comes to Arrowhead, as there was never a solid grasp of the numbers - now there is, and it's backed by assumptions and numbers from Cantor Fitzgerald - you just can't beat that.

Enjoy,
BioBoyScout

[grandcaddy]

What if you developed a 20 year spread sheet that; ARWR

1. places 4 new drugs into the clinic each year
2. it takes 7 years to get into the market and 4 years to get to 2B and partner out
3. 25% fail
4 25% partner out with $200M up front and a 20% royalty on $1B sales
5 25% parther outwith $300 M and a 20% royalty on $2 B
6. 25% the same as 520.
It would be interesting what 10 years would look like.

[Bio Boy Scout]

Grandcaddy,

There are way too many unknowns in your scenario.  More specifically, you need to know what your patient population is and how many you'll realistically be able to treat (while also taking competition into consideration) - so it would really help to know what you're treating.  It's also too difficult to know what competition will be around 5-10 years out, let alone 20 years.  Additionally, the discount rate in calculating stock price for such a scenario that you propose would be incredibly high and the chance of success would have to initially be very low for that many years out, and I could tell you with certainty that it would add no more than 10-20 cents in share price (if that).

The beauty about Arrowhead is that they're tackling a major problem with a major patient population that could realistically bring in tens of billions of dollars of revenue in just a few years, with little to no competition.  This could easily fund smaller projects that can bring in $10M - $1B a year in revenue, thereby creating a $100B+ pharmaceutical company.

Once a partnership is created and they've identified the problem and the patient population, you could then start running your numbers, and the deeper you get into testing, the lower the discount rate and the higher the chance of success.  So a DPC partnership won't give you that much of a boost until you're at least in phase 2.  The hope is that your partner will pay you milestone payments based on your successful progress.

The beauty about 520/521 is that Cantor Fitzgerald now put solid numbers behind the phase 2 trials:
1) they established a 15% discount rate (I consider that a bit high, should be around 10%-12% IMO); and
2) they determined the chances for success in 2016 to be 45%, 70% in 2017 and 2018, 80% in 2019, and 100% by 2020.

With those numbers in hand, you can now calculate your NPV (net present value) of your stock price - this is a commonly used method by all the big funds/institutions/analysts when they value stocks.  So the reason you're seeing Arrowhead's stock price rise nearly 50% over that past 1-1/2 weeks is that funds can now take a reputable firm's discount rate and odds of success and throw it into their own spreadsheets for comparison.  I have no doubt that most of these funds are coming up with numbers even better than what Cantor has come up with (kinda like what I did), so they're now competing against each other in buying Arrowhead stock.  Note that these funds do not like pushing a company's stock price by more than 5% a month unless they're sitting on a gold mine.  Since we're still seeing volume well over 1M and with a crazy rise in price, these funds believe that they're sitting on a gold mine.  I think shorts are in big trouble, as we could potentially see a 5% rise every 3-4 weeks and I don't think it will settle until we see some real data, as anticipation will be mounting and growing every day.

[digdeeper1976]

Bio Boy Scout

I think the Cantor Fitzgerald number were purposely low. Had they included all the countries the numbers would have been to high. From $6 to $15 is quite a Jump but, they could have easily made the numbers much higher. They just did not want the numbers to far from $6. If the stock had been at $15 then the numbers would have been higher.

I did not see any $$ for AAT. $4 for DPC is totally undervalued. Does anyone who has been following this company think Chris Anzalone would sell DPC for $4 a share. Arrowhead has a lot to prove with sub-q and extra-hepatic versions of DPC but, so far it has performed ( I Believe) better than anyone had anticipated.


If Chris Anzalone was going to settle for $200m and 25% I think he would have made that deal already. Arrowhead is waiting for the data to do the talking before signing a deal.

I think we should see 6mg data around June. I am guessing they might be looking for a one and done therapy. We have a couple of clues this is the case. In May they had said that cohort 7 had not been completely dosed in the 2001 multiple dose extension. They had everything they needed to start multiple doses in December. Why wait until May? Unless they were waiting for the KD to return to Baseline.

The trial dates gives us another clue primary completion date of December and final completion date of June. Why 6 months? Unless you are waiting for something. Could it be 6 months of HBsAg below the level of detection?


We should see data for ARC-521 in March. From what they said they have dosed the 2mg in HBV patients this month. They will dose the 4mg next month and the 6mg in November. The last 6mg dose will be given in February.

The patient portion is open liable so March should be doable. Dirk and his poles are something else. I am certain that 521 will have KD of at least 3log with 3 doses. In a few months we will see for sure.

Once the data comes out we will here people say.” I wish I would have seen this at $8”

By they way love your posts, I would like to read more of them.