Based on our DCF-derived intrinsic values, our target price is $300. We calculate a DCF-derived Intrinsic Value by projecting free cash flows to 2030, thereafter applying terminal growth assumptions. Consistent with our sector methodology, we use the CAPM to calculate the cost of equity. We use WACC of 6.7% and assume a 1% terminal growth rate.

There are risks to our investment thesis. On the upside:  1) better than expected penetration of Tepezza into the low-CAS patient population; and 2) better than expected clinical pipeline results. On the downside: 1) poor penetration by Tepezza into the low-CAS population; and 2) pipeline disappointments.  If the impact on the company from any of these factors proves to be greater/less than we anticipate, we believe the stock will likely diverge from our target price.