R&D NewCo worth approx. CHF1.5bn, CHF10/share
Following publication of the Actelion offer prospectus and ahead of the start of the tender period (3-30 March), we have updated our provisional “R&D NewCo” valuation. We value the identifiable pipeline assets within R&D NewCo at CHF2.7/share and the royalty stream from J&J-acquired assets at CHF0.8/share. These combined with CHF1bn of cash (CHF6.3/share), result in a NewCo valuation of ca CHF9.8/share, allowing for the dilutive effects of the initial J&J 16% equity stake and subsequent 16% convertible note. We include our NPV assessment of R&D NewCo within this note. For access to our new NPV flexor (enabling the user to flex our assumptions by drug), please contact the Exane Pharma team. We increase our Actelion target price to CHF290 (from CHF280) to reflect our NPV assessment of NewCo.