Biotech Values

[exwannabe]

SPPI - Valuation for LFA if approved?

SPPI's LFA (the left isomer of Leucovorin)has a PDUFA date in early March. SPPI has the N American only rights, and the drug has been sold for quite a while in the EU (sales over $180mm).

With a present market cap of 83M, it seams like they could get some pop on this.

The potential drawbacks I can see are :

. I assume they pay a hefty royalty to Merck Eprova

. Little visability in what whent wrong with the earlier CMC based aprovable decision (SPPI picked this up from a bankrupt company that never disclosed much).

. The indication doesn't include colorectal cancer, but SPPI plans to file an sNDA "soon" afterwards.

On the other hand, this seams like a very safe play, in that the drug has extensive use in the EU, and it's just the active isomer of the existing SOC.

Given that the company does have some pipeline products (Eoquin in P3 for bladder cancer is the most advanced), and the market cap is barely above cash, it seams the market values LFA at about 5 cents.

What am I missing here?