Question: How do they calculate multiples ? Explain in details The Method of Comparables: An Example for Biotechnology Firms R&D Amgen Biogen Chiron Genetics Institute Immunex

How do they calculate multiples ? Explain in details

The Method of Comparables: An Example for Biotechnology Firms R&D Amgen Biogen Chiron Genetics Institute Immunex Genentech Genentech book value is 1.348.78 8.096.71 1.379.00 2.233.60 925.OO 588.53 5.6 3.6 4.6 2.5 4.5 1571.o 152.0 413.0 1 38.0 151.0 795.4 406.O 15.0 28.0 307.O 101.o 158.0 109.0 81.0 3 14.3 34.0 124.4 Apply multiples to Genentech: Firm Mean Genentech 5,610.9 5,077.6 4,699.2 4,809.0 5,049.2 4.16 P/B E/P (P-B)/R&D P/Revenue Mean over all values 0.0245 10.66 6.05 The Method of Comparables: Dell, Gateway 2000 and Compaq, 1998 Book Value Sales Earnings Market P/S P/E P/B Compaq Computer Corp Gateway 2000 Inc Dell Computer Corp S24,584 6,294 12,327 $1,855 110 944 5.2 8.1 2 S10,362 53,472 2.2 28.9 1,042 8,470 77.0 1,424 Dell's Sales Earnings Book Value Average of Valuations 1.75 52.95 6.65 S12,327 $21,572 49,985 9,470 27,009 1,424

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