Sprot,
it's a neverending discussion.
The market will tell.
What I'm saying is that you, and many Others, are legittimally valuing and considering IPCI as a value company - which by the way it is not (so no value = sell or short or wait).
This is exactly where the dicotomy between Pharma companies and biotech investors perspective creates the opportunity for huge profits.
The incredible premiums from time to time paid by the big pharma to buy a small biotech are there to demonstrate that many times a biotech is paid for perspective/risky future growth and not at p/e multiples.
So I don't know if ipci is going to be that kind of bet for a big pharma. Surely each one of us has to follow his own gut and adapt to his own risk profile.
I see that the major part here are using p/e projections and obsessive earnings attention. That is ok to me. I respect that.
But for all those who can have access to investment banking modelling for biotech (and I am one of those) it is well known that biotechs are modelled based on:
drugs in pipeline
-- expected peak sales for that drug in 3 to 5 yrs
-- probability analysis about the drug receiving final approval (based on level of trials, FDA actions, etc)
-- discounting the peak sales x probability of being approved, with the discount rate being the higher the more risky is the process
-- scenario analysis to determine the most likely scenario
-- sum of parts (more than one drug) when appropriate.
So you see the disconnect between many of those who write here and the approach usually taken by practice.
But let me clear: Disconnect is not good or bad, right or wrong; it is what makes eventually the opportunity for BIG gains or BIG losses. it's part of the game. Conservative vs aggressive. It depends on the risk profile and other elements.
In conclusion:
big pharma looking for biotechs are usually searching for growth (more than value).
Those investing in biotechs are usually looking for growth more than value.
Those investing in IPCI are looking for value (earnings, with the word "now" attached).
Who is right ? Only time will tell.
