When LEO Bought Peplin - Fair Deal or a Steal?

NZBIO has been open in supporting the Government’s intent to improve the capital markets in New Zealand. The lack of a vibrant capital market and a small listed exchange has seen many of our most promising companies sold off-shore or relocated to countries with deeper capital pools. One of the key issues facing small-cap, high technology equities is the lack of research and specialised analysts.

As such NZBIO is very pleased to have secured Dr Shane Storey, Senior Research Analyst (Life Sciences) Wilson HTM to provide examples of the techniques used by specialised industry analysts, in the context of one of 2009’s most significant Australasian biotechnology acquisitions. This workshop is the first of its type to be run by NZBIO and offers significant value to Chief Executives, Business Development and Commercialisation Managers and Investors alike.

Bronwyn Dilley, Chief Executive, NZBIO

VALUATION WORKSHOP WITH SHANE STOREY

Date: Wednesday 24th March 2010
Time: 4.00 - 6.00pm
Venue: SKYCITY Convention Centre

When LEO Bought Peplin - Fair Deal or a Steal?

When LEO Pharma acquired Peplin Inc (ASX:PLI) for US$287M in 2009, some investors said: "Is that all?".  In this valuation workshop, Shane Storey (Wilson HTM) hosts an interactive case-study, looking at the LEO-Peplin transaction from an analyst's perspective.  The session will look at the valuation techniques used to value Peplin including discounted cash flow and real options analysis.  

Session I – Understanding Peplin Inc – What was on the block?

§        Company history

§        PEP005 for actinic keratosis – an introduction to Peplin’s business

§        Exercise I – Forecasting PEP005 sales in the US dermatology market

Session II – Discounted Cash Flow Valuation of Peplin Inc

§        Why is cash flow so important?

§        What are the important concepts of company valuation?

§        Among how many shares should the value be divided?

§        Exercise II – Building a quick DCF to value Peplin

Session III – Does DCF fail biotechs?  Can option pricing help?

§        Are biotechs proper companies or just “punts”?

§        Option pricing prices “punts” – here’s how

§        Exercise III – Building a quick option pricing model to value Peplin

Session IV – Was the LEO-Peplin deal fair to shareholders?

§        Who got it right?  The market or the analysts?  Why.

§        What did LEO really buy?

§        Questions