"if I did not own the stock already, would I buy it, or would I buy something else that is more attractive"
Thank you for posing the question better than I did. When I brought up ZGEN in comparison to GTCB that was my point exactly. I hold quite a bit of GTCB as well as ZGEN but a stock is not in a vacuum relative to the rest of the market and, as the market goes into a sell-off mode, what may have been more attractive a while back may not be as attractive relatively as other stocks tumble...
Generally, I am biased towards small biotech stocks and I keep nearly 50% of my portfolio in them. When GTCB was trading at $0.8 while ZGEN was near $15, I thought GTCB was more attractive. However, when GTCB went to $1.1 while ZGEN went to $10 and in the process ZGEN got the long awaited FDA approval while GTCB still has not released the top line results for US ATryn, the question as to which is a better buy became more relevant. As ususal, the answer has to do with risk Vs reward and with the timeline that one has in mind...
Since this is GTCB's board, it would be helpful for us to discuss what sort of upside we would anticipate with positive top line data and what sort of downside we would expect with negative top line data. We also need to have some sort of a measure as to what the probability of positive data is like. Personally, I agree with the general consensus here that we probably have about a 90% chance of achieving positive top line data, especially when you consider that we already know there were no DVT's in the EU study, which represents about 40% of the data. However, that 10% risk would be disastrous to the stock from these levels and could send us crashing down to $0.5 or so. On the other hand, positive data will not immediately send us to the stratosphere although I would assume that $1.5 would be a reasonable near-term target. So, putting all these into a matehematical expectation value as to what the proper GTCB price should be now we get:
<pps of GTCB> = 0.9*$1.5 + 0.1*$0.5 = $1.4
That implies that GTCB is a very strong buy at $0.8 and a decent but not superb buy at $1.1...
Comparing that to ZGEN which I think has a 50% chance at least to go past $16 in the near-term and a 50% chance to staying at around $10, we have:
<pps of ZGEN> = 0.5*$16 + 0.5*$10 = $13
Which implies that at $10 ZGEN is about as attractive as GTCB at $1.1. However, when you consider that GTCB has a slight danger of making you lose about half your investment while ZGEN is already at its lows, then the balance tips in favor of ZGEN especially for those who are risk averse because the expectation value does not tell the whole story on its own...
On the other hand, given the potential for its pipeline and its partnerships, once GTCB top line data is released and it is positive, then GTCB may become by far the better choice. Because of that, it is hard to predict how high will GTCB go on positive top line data and I assumed $1.5 as a conservative target but it could be much higher than that, in which case all the expectation value calculations above become unapplicable...LOL...
My conclusion is that both GTCB and ZGEN are good buys at this point but I do not think any of us should place all our eggs into GTCB unless we clearly understand that we are risking possibly 50% of those assets...
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