Intrinsic value of Seattle Genetics - SGEN

Previous Close

$54.84

  Intrinsic Value

$1.07

stock screener

  Rating & Target

str. sell

-98%

Previous close

$54.84

 
Intrinsic value

$1.07

 
Up/down potential

-98%

 
Rating

str. sell

We calculate the intrinsic value of SGEN 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 8.7

 

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, %
  57.20
  51.98
  47.28
  43.05
  39.25
  35.82
  32.74
  29.97
  27.47
  25.22
  23.20
  21.38
  19.74
  18.27
  16.94
  15.75
  14.67
  13.71
  12.83
  12.05
  11.35
  10.71
  10.14
  9.63
  9.16
  8.75
  8.37
  8.04
  7.73
  7.46
Revenue, $m
  758
  1,152
  1,697
  2,428
  3,380
  4,591
  6,094
  7,921
  10,097
  12,643
  15,577
  18,907
  22,640
  26,776
  31,312
  36,243
  41,561
  47,257
  53,322
  59,748
  66,528
  73,654
  81,123
  88,932
  97,082
  105,574
  114,413
  123,607
  133,164
  143,096
Variable operating expenses, $m
  1,017
  1,546
  2,277
  3,258
  4,536
  6,161
  8,179
  10,630
  13,550
  16,967
  20,904
  25,373
  30,383
  35,933
  42,021
  48,638
  55,775
  63,419
  71,559
  80,182
  89,280
  98,844
  108,867
  119,347
  130,284
  141,680
  153,542
  165,880
  178,706
  192,035
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
  1,017
  1,546
  2,277
  3,258
  4,536
  6,161
  8,179
  10,630
  13,550
  16,967
  20,904
  25,373
  30,383
  35,933
  42,021
  48,638
  55,775
  63,419
  71,559
  80,182
  89,280
  98,844
  108,867
  119,347
  130,284
  141,680
  153,542
  165,880
  178,706
  192,035
Operating income, $m
  -259
  -394
  -580
  -830
  -1,156
  -1,570
  -2,084
  -2,709
  -3,453
  -4,324
  -5,327
  -6,466
  -7,743
  -9,157
  -10,709
  -12,395
  -14,214
  -16,162
  -18,236
  -20,434
  -22,752
  -25,190
  -27,744
  -30,415
  -33,202
  -36,106
  -39,129
  -42,273
  -45,542
  -48,939
EBITDA, $m
  -233
  -354
  -522
  -746
  -1,039
  -1,411
  -1,873
  -2,435
  -3,104
  -3,887
  -4,788
  -5,812
  -6,959
  -8,231
  -9,625
  -11,141
  -12,776
  -14,527
  -16,391
  -18,367
  -20,451
  -22,641
  -24,937
  -27,338
  -29,843
  -32,453
  -35,171
  -37,997
  -40,935
  -43,988
Interest expense (income), $m
  0
  0
  6
  15
  27
  44
  65
  92
  126
  167
  216
  273
  339
  413
  497
  590
  692
  802
  922
  1,049
  1,185
  1,330
  1,482
  1,642
  1,809
  1,984
  2,167
  2,358
  2,556
  2,762
  2,977
Earnings before tax, $m
  -259
  -400
  -595
  -857
  -1,200
  -1,635
  -2,176
  -2,835
  -3,620
  -4,540
  -5,600
  -6,805
  -8,156
  -9,654
  -11,299
  -13,087
  -15,016
  -17,083
  -19,286
  -21,619
  -24,082
  -26,671
  -29,386
  -32,224
  -35,186
  -38,273
  -41,487
  -44,830
  -48,304
  -51,916
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
  -259
  -400
  -595
  -857
  -1,200
  -1,635
  -2,176
  -2,835
  -3,620
  -4,540
  -5,600
  -6,805
  -8,156
  -9,654
  -11,299
  -13,087
  -15,016
  -17,083
  -19,286
  -21,619
  -24,082
  -26,671
  -29,386
  -32,224
  -35,186
  -38,273
  -41,487
  -44,830
  -48,304
  -51,916

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
  994
  1,510
  2,224
  3,182
  4,430
  6,017
  7,987
  10,381
  13,233
  16,570
  20,415
  24,780
  29,672
  35,093
  41,038
  47,501
  54,470
  61,936
  69,885
  78,307
  87,192
  96,532
  106,321
  116,556
  127,237
  138,367
  149,952
  162,001
  174,527
  187,544
Adjusted assets (=assets-cash), $m
  994
  1,510
  2,224
  3,182
  4,430
  6,017
  7,987
  10,381
  13,233
  16,570
  20,415
  24,780
  29,672
  35,093
  41,038
  47,501
  54,470
  61,936
  69,885
  78,307
  87,192
  96,532
  106,321
  116,556
  127,237
  138,367
  149,952
  162,001
  174,527
  187,544
Revenue / Adjusted assets
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
  0.763
Average production assets, $m
  131
  199
  294
  420
  585
  794
  1,054
  1,370
  1,747
  2,187
  2,695
  3,271
  3,917
  4,632
  5,417
  6,270
  7,190
  8,175
  9,225
  10,336
  11,509
  12,742
  14,034
  15,385
  16,795
  18,264
  19,793
  21,384
  23,037
  24,756
Working capital, $m
  -5
  -8
  -12
  -17
  -24
  -32
  -43
  -55
  -71
  -89
  -109
  -132
  -158
  -187
  -219
  -254
  -291
  -331
  -373
  -418
  -466
  -516
  -568
  -623
  -680
  -739
  -801
  -865
  -932
  -1,002
Total debt, $m
  115
  278
  505
  808
  1,204
  1,707
  2,332
  3,090
  3,994
  5,052
  6,271
  7,655
  9,206
  10,924
  12,809
  14,857
  17,067
  19,433
  21,953
  24,623
  27,440
  30,400
  33,503
  36,748
  40,134
  43,662
  47,334
  51,154
  55,125
  59,251
Total liabilities, $m
  315
  479
  705
  1,009
  1,404
  1,907
  2,532
  3,291
  4,195
  5,253
  6,472
  7,855
  9,406
  11,124
  13,009
  15,058
  17,267
  19,634
  22,154
  24,823
  27,640
  30,601
  33,704
  36,948
  40,334
  43,862
  47,535
  51,354
  55,325
  59,451
Total equity, $m
  679
  1,031
  1,519
  2,173
  3,026
  4,110
  5,455
  7,090
  9,038
  11,318
  13,943
  16,925
  20,266
  23,968
  28,029
  32,443
  37,203
  42,302
  47,732
  53,484
  59,552
  65,931
  72,617
  79,608
  86,903
  94,504
  102,417
  110,647
  119,202
  128,093
Total liabilities and equity, $m
  994
  1,510
  2,224
  3,182
  4,430
  6,017
  7,987
  10,381
  13,233
  16,571
  20,415
  24,780
  29,672
  35,092
  41,038
  47,501
  54,470
  61,936
  69,886
  78,307
  87,192
  96,532
  106,321
  116,556
  127,237
  138,366
  149,952
  162,001
  174,527
  187,544
Debt-to-equity ratio
  0.170
  0.270
  0.330
  0.370
  0.400
  0.420
  0.430
  0.440
  0.440
  0.450
  0.450
  0.450
  0.450
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
Adjusted equity ratio
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683
  0.683

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -259
  -400
  -595
  -857
  -1,200
  -1,635
  -2,176
  -2,835
  -3,620
  -4,540
  -5,600
  -6,805
  -8,156
  -9,654
  -11,299
  -13,087
  -15,016
  -17,083
  -19,286
  -21,619
  -24,082
  -26,671
  -29,386
  -32,224
  -35,186
  -38,273
  -41,487
  -44,830
  -48,304
  -51,916
Depreciation, amort., depletion, $m
  26
  40
  59
  84
  117
  159
  211
  274
  349
  437
  539
  654
  783
  926
  1,083
  1,254
  1,438
  1,635
  1,845
  2,067
  2,302
  2,548
  2,807
  3,077
  3,359
  3,653
  3,959
  4,277
  4,607
  4,951
Funds from operations, $m
  -233
  -360
  -537
  -773
  -1,083
  -1,476
  -1,966
  -2,561
  -3,271
  -4,102
  -5,061
  -6,151
  -7,373
  -8,728
  -10,215
  -11,833
  -13,578
  -15,448
  -17,441
  -19,552
  -21,780
  -24,123
  -26,579
  -29,147
  -31,827
  -34,621
  -37,528
  -40,553
  -43,697
  -46,964
Change in working capital, $m
  -2
  -3
  -4
  -5
  -7
  -8
  -11
  -13
  -15
  -18
  -21
  -23
  -26
  -29
  -32
  -35
  -37
  -40
  -42
  -45
  -47
  -50
  -52
  -55
  -57
  -59
  -62
  -64
  -67
  -70
Cash from operations, $m
  -231
  -358
  -533
  -768
  -1,076
  -1,468
  -1,955
  -2,548
  -3,255
  -4,084
  -5,041
  -6,127
  -7,347
  -8,699
  -10,183
  -11,798
  -13,541
  -15,409
  -17,398
  -19,507
  -21,733
  -24,073
  -26,526
  -29,092
  -31,770
  -34,561
  -37,466
  -40,488
  -43,630
  -46,895
Maintenance CAPEX, $m
  -17
  -26
  -40
  -59
  -84
  -117
  -159
  -211
  -274
  -349
  -437
  -539
  -654
  -783
  -926
  -1,083
  -1,254
  -1,438
  -1,635
  -1,845
  -2,067
  -2,302
  -2,548
  -2,807
  -3,077
  -3,359
  -3,653
  -3,959
  -4,277
  -4,607
New CAPEX, $m
  -48
  -68
  -94
  -126
  -165
  -209
  -260
  -316
  -376
  -441
  -507
  -576
  -646
  -716
  -785
  -853
  -920
  -985
  -1,049
  -1,112
  -1,173
  -1,233
  -1,292
  -1,351
  -1,410
  -1,469
  -1,529
  -1,590
  -1,653
  -1,718
Cash from investing activities, $m
  -65
  -94
  -134
  -185
  -249
  -326
  -419
  -527
  -650
  -790
  -944
  -1,115
  -1,300
  -1,499
  -1,711
  -1,936
  -2,174
  -2,423
  -2,684
  -2,957
  -3,240
  -3,535
  -3,840
  -4,158
  -4,487
  -4,828
  -5,182
  -5,549
  -5,930
  -6,325
Free cash flow, $m
  -296
  -452
  -667
  -953
  -1,325
  -1,794
  -2,374
  -3,075
  -3,906
  -4,874
  -5,985
  -7,242
  -8,647
  -10,198
  -11,895
  -13,735
  -15,715
  -17,832
  -20,083
  -22,464
  -24,973
  -27,608
  -30,367
  -33,250
  -36,257
  -39,389
  -42,649
  -46,038
  -49,560
  -53,221
Issuance/(repayment) of debt, $m
  115
  164
  226
  304
  396
  503
  625
  759
  904
  1,058
  1,219
  1,384
  1,551
  1,718
  1,885
  2,049
  2,209
  2,367
  2,520
  2,670
  2,817
  2,961
  3,103
  3,244
  3,386
  3,528
  3,672
  3,820
  3,971
  4,127
Issuance/(repurchase) of shares, $m
  506
  753
  1,083
  1,511
  2,053
  2,719
  3,522
  4,470
  5,568
  6,819
  8,226
  9,786
  11,498
  13,357
  15,359
  17,501
  19,776
  22,182
  24,715
  27,372
  30,151
  33,050
  36,071
  39,214
  42,481
  45,875
  49,400
  53,059
  56,859
  60,806
Cash from financing (excl. dividends), $m  
  621
  917
  1,309
  1,815
  2,449
  3,222
  4,147
  5,229
  6,472
  7,877
  9,445
  11,170
  13,049
  15,075
  17,244
  19,550
  21,985
  24,549
  27,235
  30,042
  32,968
  36,011
  39,174
  42,458
  45,867
  49,403
  53,072
  56,879
  60,830
  64,933
Total cash flow (excl. dividends), $m
  325
  465
  642
  862
  1,124
  1,428
  1,773
  2,154
  2,566
  3,003
  3,459
  3,927
  4,402
  4,877
  5,349
  5,815
  6,271
  6,717
  7,152
  7,578
  7,994
  8,403
  8,807
  9,209
  9,610
  10,014
  10,424
  10,841
  11,270
  11,712
Retained Cash Flow (-), $m
  -506
  -753
  -1,083
  -1,511
  -2,053
  -2,719
  -3,522
  -4,470
  -5,568
  -6,819
  -8,226
  -9,786
  -11,498
  -13,357
  -15,359
  -17,501
  -19,776
  -22,182
  -24,715
  -27,372
  -30,151
  -33,050
  -36,071
  -39,214
  -42,481
  -45,875
  -49,400
  -53,059
  -56,859
  -60,806
Prev. year cash balance distribution, $m
  246
  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
  65
  -288
  -441
  -650
  -929
  -1,291
  -1,749
  -2,316
  -3,002
  -3,816
  -4,767
  -5,859
  -7,096
  -8,480
  -10,010
  -11,686
  -13,505
  -15,465
  -17,563
  -19,794
  -22,156
  -24,647
  -27,264
  -30,006
  -32,871
  -35,861
  -38,976
  -42,218
  -45,589
  -49,094
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  62
  -264
  -383
  -535
  -720
  -937
  -1,182
  -1,448
  -1,724
  -2,001
  -2,264
  -2,500
  -2,698
  -2,847
  -2,939
  -2,970
  -2,939
  -2,848
  -2,704
  -2,515
  -2,292
  -2,045
  -1,787
  -1,528
  -1,279
  -1,046
  -837
  -653
  -498
  -370
Current shareholders' claim on cash, %
  89.5
  80.6
  72.9
  66.3
  60.6
  55.6
  51.2
  47.3
  43.9
  40.8
  38.0
  35.5
  33.3
  31.2
  29.3
  27.6
  26.0
  24.6
  23.2
  22.0
  20.8
  19.7
  18.7
  17.7
  16.8
  16.0
  15.2
  14.4
  13.7
  13.1

Seattle Genetics, Inc. is a biotechnology company focused on the development and commercialization of therapies for the treatment of cancer. The Company is engaged in the development and sale of pharmaceutical products on its own behalf or in collaboration with others. The Company's marketed product ADCETRIS, or brentuximab vedotin, is an antibody-drug conjugate (ADC). In addition to ADCETRIS, the Company's pipeline includes other clinical-stage ADC programs, such as ASG-22ME, SGN-LIV1A, SGN-CD19A, SGN-CD19B, SGN-CD123A, SGN-352A, and ASG-15ME, as well as two immuno-oncology agents, SEA-CD40, which is based on its sugar-engineered antibody (SEA) technology, and SGN-2FF, which is a small molecule. It also has multiple preclinical and research-stage programs that employ its technologies, including SGN-CD48A and a preclinical ADC. ADCETRIS is an ADC comprising an anti-CD30 monoclonal antibody attached by a protease-cleavable linker to a microtubule disrupting agent.

FINANCIAL RATIOS  of  Seattle Genetics (SGEN)

Valuation Ratios
P/E Ratio -55.7
Price to Sales 18.7
Price to Book 12.3
Price to Tangible Book
Price to Cash Flow -80.4
Price to Free Cash Flow -62.4
Growth Rates
Sales Growth Rate 24%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 115.4%
Cap. Spend. - 3 Yr. Gr. Rate 4.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -16.2%
Ret/ On Assets - 3 Yr. Avg. -16.7%
Return On Total Capital -21.2%
Ret/ On T. Cap. - 3 Yr. Avg. -27.5%
Return On Equity -21.2%
Return On Equity - 3 Yr. Avg. -27.5%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 90%
Gross Margin - 3 Yr. Avg. 89.5%
EBITDA Margin -29.2%
EBITDA Margin - 3 Yr. Avg. -27.5%
Operating Margin -34.2%
Oper. Margin - 3 Yr. Avg. -32.3%
Pre-Tax Margin -33.5%
Pre-Tax Margin - 3 Yr. Avg. -31.9%
Net Profit Margin -33.5%
Net Profit Margin - 3 Yr. Avg. -31.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

SGEN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SGEN stock intrinsic value calculation we used $482.25 million for the last fiscal year's total revenue generated by Seattle Genetics. The default revenue input number comes from 0001 income statement of Seattle Genetics. 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 SGEN stock valuation model: a) initial revenue growth rate of 57.2% 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 4.3%, whose default value for SGEN is calculated based on our internal credit rating of Seattle Genetics, 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 Seattle Genetics.
    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 SGEN stock the variable cost ratio is equal to 134.2%.

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 SGEN 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 5.4% for Seattle Genetics.

Corporate tax rate of 27% is the nominal tax rate for Seattle Genetics. 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 SGEN 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 SGEN are equal to 17.3%.

Life of production assets of 3.4 years is the average useful life of capital assets used in Seattle Genetics 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 SGEN is equal to -0.7%. 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 - $677.569 million for Seattle Genetics - 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 158.224 million for Seattle Genetics 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 Seattle Genetics at the current share price and the inputted number of shares is $8.7 billion.

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COMPANY NEWS

▶ Microsoft and Seattle Genetics buildings are part of a big Bothell sale   [05:51PM  American City Business Journals]
▶ Seattle Genetics: "Now the Hard Work Begins"   [Oct-30-18 02:50PM  Motley Fool]
▶ Seattle Genetics: 3Q Earnings Snapshot   [Oct-25-18 04:58PM  Associated Press]
▶ 5 Health Care Stocks Gurus Are Buying   [Sep-17-18 05:26PM  GuruFocus.com]
▶ Seattle Genetics' Latest Approval Is the Best Yet   [Jul-31-18 02:30PM  Motley Fool]
▶ 3 Hot Biotech Stocks With More Gains Ahead   [Jul-23-18 06:00AM  Investopedia]
▶ 3 Biotech Stocks Poised for 12% Gains   [Jun-01-18 12:16PM  Investopedia]
▶ 4 Biotech Stocks Set to Rise By 14% or More   [May-14-18 06:00AM  Investopedia]
▶ The Bothell economy: City looks to Lake Union area as model to build up biotech hub   [May-03-18 09:05AM  American City Business Journals]
▶ Why Seattle Genetics Jumped Higher Today   [12:15PM  Motley Fool]
▶ Seattle Genetics: 1Q Earnings Snapshot   [Apr-26-18 05:39PM  Associated Press]
▶ Seattle Genetics searches for its 10th building to keep up with growth   [Apr-19-18 05:28PM  American City Business Journals]
▶ Seattle Genetics adds second woman to its board with the appointment of Alpna Seth   [Mar-16-18 03:15PM  American City Business Journals]

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