E3.8. A Stab at Valuation Using Multiples: Biotech Firms (Easy) The following table gives accounting data from

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E3.8. A Stab at Valuation Using Multiples: Biotech Firms (Easy) The following table gives accounting data from the 1994 annual reports of six biotechnol- ogy 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. Company Market Value 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 Chiran 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 81.01 -34.0 Genentech ? 7 795.4 314.3 124.4

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