A Stab at Valuation Using Multiples: Biotech Firms (Easy)

The following table gives accounting data from the 1994 annual reports of six biotechnology firms. The market value of the equity of five of the firms is also given. All numbers are in millions of dollars. From these numbers, estimate a value for Genentech, Inc. Genentech had a book value of $1,349 million in 1994.

Market Value Company of Equity Price/Book Revenue R&D Net Income Amgen $8,096.71 5.6 $1,571.0 $307.0 $406.0 Biogen 1,379.00 3.6 152.0 101.0 15.0 Chiron 2,233.60 4.6 413.0 158.0 28.0 Genetics Institute 925.00 2.5 138.0 109.0 -7.0 Immunex 588.53 4.5 151.0 81.0 -34.0 Genentech ? ? 795.4 314.3 124.4