Idenix Pharmaceuticals (IDIX)

[laker9029]

<<Cash flow positive ...... Absolutely.>>

Exactly!, and thanks for confirming my reason for investing in this opportunity. I am baffled that the street does not recognize this opportunity -- a built-in stream of cash flow, from a drug that has global relevance, possibly better efficacy and safety and is lower cost (important in emerging regions)than current first line treatments. Also, the market is growing dramatically due to increased diagnosis and treatment availability in emerging nations and commercialization has been taken over by a deep-pocketd partner with an extensive global marketing and sales organization. Royalties are likely to be at least 20%, based on the PR, which stated that they would be in line with industry norms (or something to that effect).

So (back of envelope) it looks to me that IDIX has potential to be cash flow neutral by late 2008 and have net (royalties-burn)cash flow potential of at least $30-$40 million ($250M*.2 - $20M) by 2010 (assuming continued success in ramp-up and growth of the HBV market as indicated in #msg-23007328). This scenario suggest a EPS of $.5-$.7 which at a multiple of 30X gives us a share price of $15 to $21 (undiscounted) for the cash flow from Tyzeka alone... I.E. assigning zero value to the pipeline and intellectual assets (except in setting the multiple at 30X).

If this is even close, it won't stay secret long. Of course, mgmt could burn the cash at a greater rate, etc., the market could grow more slowly..... or we could have a take-out by Novartis, great news from the clinic, etc.... but this looks reasonable to me.

So much for the efficient market theory..



L