Spin-off reshapes AnaptysBio’s business model

AnaptysBio (ANAB) has completed the spin-off of First Tracks Biotherapeutics, shifting from running biopharma operations to managing royalty-focused collaborations around Jemperli with GSK and imsidolimab with Vanda.

The company now plans to operate as a virtual business, emphasizing streamlined staffing and expenses, with an explicit goal of protecting and returning collaboration-derived royalties to shareholders.

The share price has eased back recently, with a 7 day share price return of a 23.36% decline and a 30 day share price return of an 18.64% decline. However, the 1 year total shareholder return is very large at around 7x and the 5 year total shareholder return is also very large. This suggests that momentum has cooled in the short term after a strong multi year run.

If this shift at AnaptysBio has you reassessing opportunities in the sector, it could be a good moment to scan for other biotech names using our 34 healthcare AI stocks.

With AnaptysBio now centered on royalties, a value score of 4, recent gains on a 1 year view and the last close at US$51.27, the key question is whether this remains mispriced or if markets already reflect its future growth.

Preferred Price-to-Sales of 6.3x: Is it justified?

On a P/S of 6.3x at the last close of $51.27, AnaptysBio screens as cheaper than both its biotech peers and the wider US biotechs industry.

The P/S ratio compares the company’s market value to its $234.603 million of revenue and is a common way to look at unprofitable biotech names where earnings are not yet a guide. Because AnaptysBio is loss making today, investors often pay closer attention to what they are paying for each dollar of current and expected sales rather than current profit.

Here, that 6.3x P/S is presented as good value versus the US biotechs industry average of 11.5x and a peer average of 10.9x. This represents a sizeable discount. However, when set against an estimated fair P/S of 3.9x, the shares look expensive relative to a level the market could move toward if sentiment or expectations cooled.

Result: Price-to-sales of 6.3x (ABOUT RIGHT)

However, you still need to weigh risks such as ongoing losses of US$13.232 million and the reliance on partners like GSK and Vanda for key royalty streams.

Another way to look at value

While the 6.3x P/S ratio suggests AnaptysBio is cheaper than peers today, the SWS DCF model points the other way, with an estimated future cash flow value of $442.72 per share compared with the current $51.27. That gap frames a very different story, so which signal do you trust?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out AnaptysBio for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 54 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With mixed signals across valuation methods and sentiment split between risks and rewards, this is a good time to look through the numbers yourself, weigh both sides and focus on the 2 key rewards and 3 important warning signs.

Looking for more investment ideas?

If AnaptysBio has sparked fresh thinking, do not stop here. Use focused stock lists to spot other opportunities that might fit your goals before they move.

• Target potential upside in companies the market may be overlooking by scanning our screener containing 23 high quality undiscovered gems.
• Strengthen your income stream by reviewing stocks in the 13 dividend fortresses.
• Dial back portfolio risk and focus on resilience with the 74 resilient stocks with low risk scores.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.