Sunday, April 03, 2016 10:12:50 AM
The following is my analysis.
GNCA has an accumulated deficit of approx. $158 million. That is their accumulated loses to date to develop their pipeline. The recent announcement of the successful phase 2 validate the viability of their pipeline to this point. Therefore that investment to this date is sound and worth at least $158 million.
There should be no doubt that some pharmaceutical company would pay $158 million to own Gen003 and the rest of the pipeline out right at this time.
As of year end there was also $85 million of cash and investments net of debt.
Therefore, the actual fundamental value of the company based on historical cost is $243 million. This is a historical evaluation and does not include any price appreciation due to the actual discounted cash flows and success probabilities of their pipeline candidates and platform.
The latest SEC filing shows 28 million shares issued and outstanding. $243 million divided by 28 million is approximately $8.68 per share.
Is there future risk? Certainly. But the risk is for future funds spent on development from here.
IMO, GNCA is a buy for investors at any price below $7.82 per share. A discount of 10% from historical value.
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