Intrinsic value of BioDelivery Sciences International, Inc. - BDSI

Previous Close

$5.11

  Intrinsic Value

$0.10

stock screener

  Rating & Target

str. sell

-98%

Previous close

$5.11

 
Intrinsic value

$0.10

 
Up/down potential

-98%

 
Rating

str. sell

We calculate the intrinsic value of BDSI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  44.10
  40.19
  36.67
  33.50
  30.65
  28.09
  25.78
  23.70
  21.83
  20.15
  18.63
  17.27
  16.04
  14.94
  13.94
  13.05
  12.25
  11.52
  10.87
  10.28
  9.75
  9.28
  8.85
  8.47
  8.12
  7.81
  7.53
  7.27
  7.05
  6.84
Revenue, $m
  81
  113
  155
  206
  270
  345
  434
  537
  655
  787
  933
  1,095
  1,270
  1,460
  1,663
  1,881
  2,111
  2,354
  2,610
  2,878
  3,159
  3,452
  3,757
  4,076
  4,406
  4,750
  5,108
  5,480
  5,866
  6,267
Variable operating expenses, $m
  119
  167
  229
  305
  399
  510
  642
  794
  967
  1,162
  1,378
  1,616
  1,876
  2,156
  2,456
  2,777
  3,117
  3,476
  3,854
  4,250
  4,665
  5,097
  5,548
  6,018
  6,507
  7,015
  7,543
  8,091
  8,661
  9,254
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  119
  167
  229
  305
  399
  510
  642
  794
  967
  1,162
  1,378
  1,616
  1,876
  2,156
  2,456
  2,777
  3,117
  3,476
  3,854
  4,250
  4,665
  5,097
  5,548
  6,018
  6,507
  7,015
  7,543
  8,091
  8,661
  9,254
Operating income, $m
  -39
  -54
  -74
  -99
  -129
  -165
  -207
  -256
  -312
  -375
  -445
  -522
  -605
  -696
  -793
  -896
  -1,006
  -1,122
  -1,244
  -1,372
  -1,506
  -1,645
  -1,791
  -1,943
  -2,100
  -2,264
  -2,435
  -2,612
  -2,796
  -2,987
EBITDA, $m
  -34
  -48
  -65
  -87
  -113
  -145
  -182
  -226
  -275
  -330
  -392
  -460
  -533
  -613
  -699
  -790
  -887
  -989
  -1,096
  -1,209
  -1,327
  -1,450
  -1,578
  -1,712
  -1,851
  -1,995
  -2,145
  -2,302
  -2,464
  -2,632
Interest expense (income), $m
  3
  11
  17
  27
  38
  53
  71
  93
  118
  147
  181
  218
  260
  306
  356
  409
  467
  529
  594
  664
  736
  813
  892
  976
  1,063
  1,153
  1,247
  1,345
  1,447
  1,552
  1,662
Earnings before tax, $m
  -49
  -72
  -101
  -137
  -182
  -236
  -300
  -374
  -460
  -556
  -663
  -781
  -911
  -1,051
  -1,202
  -1,364
  -1,535
  -1,716
  -1,908
  -2,108
  -2,318
  -2,538
  -2,767
  -3,005
  -3,253
  -3,511
  -3,780
  -4,058
  -4,348
  -4,649
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -49
  -72
  -101
  -137
  -182
  -236
  -300
  -374
  -460
  -556
  -663
  -781
  -911
  -1,051
  -1,202
  -1,364
  -1,535
  -1,716
  -1,908
  -2,108
  -2,318
  -2,538
  -2,767
  -3,005
  -3,253
  -3,511
  -3,780
  -4,058
  -4,348
  -4,649

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  124
  174
  238
  318
  416
  532
  669
  828
  1,009
  1,212
  1,438
  1,686
  1,957
  2,249
  2,563
  2,898
  3,252
  3,627
  4,021
  4,435
  4,867
  5,319
  5,790
  6,280
  6,790
  7,320
  7,871
  8,443
  9,038
  9,656
Adjusted assets (=assets-cash), $m
  124
  174
  238
  318
  416
  532
  669
  828
  1,009
  1,212
  1,438
  1,686
  1,957
  2,249
  2,563
  2,898
  3,252
  3,627
  4,021
  4,435
  4,867
  5,319
  5,790
  6,280
  6,790
  7,320
  7,871
  8,443
  9,038
  9,656
Revenue / Adjusted assets
  0.653
  0.649
  0.651
  0.648
  0.649
  0.648
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
Average production assets, $m
  35
  49
  67
  90
  118
  151
  189
  234
  285
  343
  407
  477
  554
  636
  725
  820
  920
  1,026
  1,138
  1,255
  1,377
  1,505
  1,638
  1,777
  1,921
  2,071
  2,227
  2,389
  2,557
  2,732
Working capital, $m
  1
  1
  2
  2
  3
  4
  5
  6
  8
  9
  11
  13
  15
  18
  20
  23
  25
  28
  31
  35
  38
  41
  45
  49
  53
  57
  61
  66
  70
  75
Total debt, $m
  85
  130
  187
  259
  347
  452
  575
  718
  881
  1,064
  1,267
  1,491
  1,734
  1,997
  2,280
  2,581
  2,900
  3,237
  3,592
  3,964
  4,353
  4,760
  5,184
  5,625
  6,083
  6,561
  7,056
  7,572
  8,107
  8,664
Total liabilities, $m
  112
  157
  214
  286
  374
  479
  603
  745
  908
  1,091
  1,294
  1,518
  1,761
  2,024
  2,307
  2,608
  2,927
  3,264
  3,619
  3,991
  4,381
  4,787
  5,211
  5,652
  6,111
  6,588
  7,083
  7,599
  8,134
  8,691
Total equity, $m
  12
  17
  24
  32
  42
  53
  67
  83
  101
  121
  144
  169
  196
  225
  256
  290
  325
  363
  402
  443
  487
  532
  579
  628
  679
  732
  787
  844
  904
  966
Total liabilities and equity, $m
  124
  174
  238
  318
  416
  532
  670
  828
  1,009
  1,212
  1,438
  1,687
  1,957
  2,249
  2,563
  2,898
  3,252
  3,627
  4,021
  4,434
  4,868
  5,319
  5,790
  6,280
  6,790
  7,320
  7,870
  8,443
  9,038
  9,657
Debt-to-equity ratio
  6.820
  7.440
  7.860
  8.150
  8.350
  8.490
  8.590
  8.670
  8.730
  8.780
  8.810
  8.840
  8.860
  8.880
  8.890
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -49
  -72
  -101
  -137
  -182
  -236
  -300
  -374
  -460
  -556
  -663
  -781
  -911
  -1,051
  -1,202
  -1,364
  -1,535
  -1,716
  -1,908
  -2,108
  -2,318
  -2,538
  -2,767
  -3,005
  -3,253
  -3,511
  -3,780
  -4,058
  -4,348
  -4,649
Depreciation, amort., depletion, $m
  5
  7
  9
  12
  16
  20
  25
  31
  37
  45
  53
  62
  72
  83
  94
  106
  120
  133
  148
  163
  179
  195
  213
  231
  250
  269
  289
  310
  332
  355
Funds from operations, $m
  -44
  -65
  -92
  -125
  -166
  -216
  -275
  -344
  -422
  -511
  -610
  -719
  -839
  -969
  -1,108
  -1,257
  -1,416
  -1,583
  -1,760
  -1,945
  -2,139
  -2,342
  -2,554
  -2,774
  -3,004
  -3,242
  -3,490
  -3,748
  -4,016
  -4,294
Change in working capital, $m
  0
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  5
  5
Cash from operations, $m
  -45
  -65
  -92
  -126
  -167
  -217
  -276
  -345
  -424
  -513
  -612
  -721
  -841
  -971
  -1,111
  -1,260
  -1,418
  -1,586
  -1,763
  -1,948
  -2,143
  -2,346
  -2,558
  -2,778
  -3,008
  -3,247
  -3,495
  -3,753
  -4,020
  -4,299
Maintenance CAPEX, $m
  -3
  -5
  -6
  -9
  -12
  -15
  -20
  -25
  -30
  -37
  -45
  -53
  -62
  -72
  -83
  -94
  -106
  -120
  -133
  -148
  -163
  -179
  -195
  -213
  -231
  -250
  -269
  -289
  -310
  -332
New CAPEX, $m
  -11
  -14
  -18
  -23
  -28
  -33
  -39
  -45
  -51
  -58
  -64
  -70
  -77
  -83
  -89
  -95
  -100
  -106
  -112
  -117
  -122
  -128
  -133
  -139
  -144
  -150
  -156
  -162
  -168
  -175
Cash from investing activities, $m
  -14
  -19
  -24
  -32
  -40
  -48
  -59
  -70
  -81
  -95
  -109
  -123
  -139
  -155
  -172
  -189
  -206
  -226
  -245
  -265
  -285
  -307
  -328
  -352
  -375
  -400
  -425
  -451
  -478
  -507
Free cash flow, $m
  -59
  -84
  -117
  -157
  -206
  -265
  -335
  -414
  -505
  -607
  -720
  -845
  -980
  -1,126
  -1,282
  -1,449
  -1,625
  -1,812
  -2,008
  -2,213
  -2,428
  -2,653
  -2,886
  -3,130
  -3,383
  -3,646
  -3,920
  -4,204
  -4,499
  -4,806
Issuance/(repayment) of debt, $m
  33
  45
  58
  72
  88
  105
  123
  143
  163
  183
  203
  224
  244
  263
  282
  301
  319
  337
  355
  372
  389
  406
  424
  441
  459
  477
  496
  515
  535
  557
Issuance/(repurchase) of shares, $m
  54
  77
  107
  145
  192
  248
  314
  390
  478
  576
  686
  806
  938
  1,081
  1,234
  1,397
  1,571
  1,754
  1,947
  2,150
  2,362
  2,583
  2,814
  3,054
  3,304
  3,564
  3,835
  4,116
  4,407
  4,711
Cash from financing (excl. dividends), $m  
  87
  122
  165
  217
  280
  353
  437
  533
  641
  759
  889
  1,030
  1,182
  1,344
  1,516
  1,698
  1,890
  2,091
  2,302
  2,522
  2,751
  2,989
  3,238
  3,495
  3,763
  4,041
  4,331
  4,631
  4,942
  5,268
Total cash flow (excl. dividends), $m
  29
  38
  48
  60
  73
  87
  103
  119
  135
  152
  169
  185
  202
  218
  234
  250
  265
  280
  294
  308
  323
  337
  351
  366
  380
  395
  411
  427
  444
  461
Retained Cash Flow (-), $m
  -54
  -77
  -107
  -145
  -192
  -248
  -314
  -390
  -478
  -576
  -686
  -806
  -938
  -1,081
  -1,234
  -1,397
  -1,571
  -1,754
  -1,947
  -2,150
  -2,362
  -2,583
  -2,814
  -3,054
  -3,304
  -3,564
  -3,835
  -4,116
  -4,407
  -4,711
Prev. year cash balance distribution, $m
  22
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -3
  -39
  -59
  -85
  -119
  -160
  -211
  -272
  -343
  -424
  -517
  -621
  -736
  -862
  -1,000
  -1,148
  -1,306
  -1,474
  -1,653
  -1,841
  -2,039
  -2,246
  -2,463
  -2,689
  -2,924
  -3,169
  -3,424
  -3,689
  -3,964
  -4,250
Discount rate, %
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
  -3
  -34
  -48
  -65
  -83
  -102
  -121
  -139
  -156
  -169
  -179
  -185
  -187
  -183
  -176
  -165
  -151
  -135
  -118
  -100
  -83
  -67
  -53
  -41
  -31
  -22
  -16
  -11
  -7
  -5
Current shareholders' claim on cash, %
  57.9
  35.8
  22.2
  13.8
  8.6
  5.4
  3.4
  2.1
  1.4
  0.9
  0.6
  0.4
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

BioDelivery Sciences International, Inc. is a specialty pharmaceutical company. The Company develops and commercializes, either on its own or in partnerships with third parties, applications of approved therapeutics to address unmet medical needs using drug delivery technologies. The Company develops pharmaceutical products aimed principally in the areas of pain management and addiction. The Company's products utilize the BioErodible MucoAdhesive (BEMA) drug delivery technology, a small, erodible polymer film for application to the buccal mucosa (the lining inside the cheek). The Company's United Sates Food and Drug Administration (FDA) approved product, ONSOLIS (fentanyl buccal soluble film), as well as its approved products BUNAVAIL (buprenorphine and naloxone buccal film) buccal film and BELBUCA (buprenorphine) buccal film, utilize BEMA technology.

FINANCIAL RATIOS  of  BioDelivery Sciences International, Inc. (BDSI)

Valuation Ratios
P/E Ratio -4.1
Price to Sales 17.3
Price to Book -15.4
Price to Tangible Book
Price to Cash Flow -5.1
Price to Free Cash Flow -5.1
Growth Rates
Sales Growth Rate -66.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -100%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity -161.1%
Total Debt to Equity -161.1%
Interest Coverage -21
Management Effectiveness
Return On Assets -82.6%
Ret/ On Assets - 3 Yr. Avg. -67.8%
Return On Total Capital -186.1%
Ret/ On T. Cap. - 3 Yr. Avg. -124.8%
Return On Equity -957.1%
Return On Equity - 3 Yr. Avg. -416.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 25%
Gross Margin - 3 Yr. Avg. 65.2%
EBITDA Margin -393.8%
EBITDA Margin - 3 Yr. Avg. -200%
Operating Margin -393.8%
Oper. Margin - 3 Yr. Avg. -188.9%
Pre-Tax Margin -418.8%
Pre-Tax Margin - 3 Yr. Avg. -212.1%
Net Profit Margin -418.8%
Net Profit Margin - 3 Yr. Avg. -212.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BDSI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BDSI stock intrinsic value calculation we used $56 million for the last fiscal year's total revenue generated by BioDelivery Sciences International, Inc.. The default revenue input number comes from 0001 income statement of BioDelivery Sciences International, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BDSI stock valuation model: a) initial revenue growth rate of 44.1% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.2%, whose default value for BDSI is calculated based on our internal credit rating of BioDelivery Sciences International, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of BioDelivery Sciences International, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BDSI stock the variable cost ratio is equal to 148.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BDSI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 20.5% for BioDelivery Sciences International, Inc..

Corporate tax rate of 27% is the nominal tax rate for BioDelivery Sciences International, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BDSI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BDSI are equal to 43.6%.

Life of production assets of 7.7 years is the average useful life of capital assets used in BioDelivery Sciences International, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BDSI is equal to 1.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $29.742 million for BioDelivery Sciences International, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 70.691 million for BioDelivery Sciences International, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of BioDelivery Sciences International, Inc. at the current share price and the inputted number of shares is $0.4 billion.

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