I believe that we all think our market cap should be substantially higher, and I believe it will be when more of the facts are known, but when I compare it to my other major biotech holding, IMGN, it's not that out of sync. IMGN current market cap is under $1 billion in spite of having a PDUFA date in November. Investors there all think it should be higher, but at this time it seems that the proof of the pudding is in the eating, and that means, show us the approval.
Don't get me wrong, I believe that both companies market caps should rise to $2 to $5 billion as more information comes out and approval approaches. The only way I see either reaching $10 billion or more pre-approval is if major media picks up a story and really runs with it. It could happen, but I don't believe that we should count on it.
If we want a partnership, or buyout, at the sort of terms that we discuss, namely $20 billion or more, and most of us think it should be substantially more, we need to have a market cap that's at least half the price a partner or buyer is willing to pay. If by chance we do get major media coverage and demand for the stock sends it to $10 or more, anything is possible. If not, it will be approval and revenue that sends the stock to over $10, a price at which L.P. could gain an acceptable offer for a partnership or buyout.
What we don't know is how flexible L.P. may be. In a market that's generally down, would she lower her expectations. Could we reach $3 to $5 and take an offer at double the share price then. I cannot say I'd be thrilled with it, but I can't say the majority of us wouldn't at least be happy. At that price I'd rather it be a partnership, so we could continue to grow, but if it's a buyout, it still would be a very healthy profit.
In a buyout, the decision I believe we'd all have to make is whether to take the money, and pay the taxes, or take the stock in the acquiring company. I suspect that most of us will do a little of both.
By the way, I feel much the same about IMGN, while I've held it much longer, NWBO is by far my biggest investment. I really don't look forward to either being acquired, but if it should happen I suspect that I'll take some cash, and some stock in the acquiring company.
Gary
