Biotech Values

[mcbio]

LixiLan-L is a combination of Lantus and Lyxumia, a GLP-1 drug licensed from Zealand Pharma.

Zealand shares have had a nice turn around and up a further 20% today alone. Market cap is now around $500M I think. Even after the nice run, is it crazy to think shares might still represent a nice LT risk-reward here? Keep in mind Zealand gets I believe low double-digit royalties on net sales of the full LixiLan drug (not just the Lyxumia component). I believe Lantus alone did almost $7B in sales for SNY last year. I realize there are some generic fears for Lantus itself in the near term and competition from NVO (and I assume others) on competitive drugs similar to LixiLan. But is it a real stretch to think that LixiLan could be at least a billion dollar drug, if not multi-billion, in a few years? If so, Zealand might still be relatively cheap here for the LT. Am I missing something?