Robert/Grateful/frog...My reading of the report, and my opinion based on the uncertainty surrounding the FDA's role is that the initial target price was based solely on the company's ability to grow it's Forensics business.
They discounted genealogy as a major growth opportunity and spent considerable time discussing the regulatory uncertainty and potential delays related to FDA action that could impact the pharmacogenomic opportunity. IMO, that is all any competent analyst COULD do.
How, for instance, would you include the pharmaco "potential", and if you did, where would you set a target? They obviously thought that the company has interesting and unique technology, but with FDA final rulemaking a year away, and without any guidance even having been issued, what is an honest analyst to do? I think the "conclusion" summed it up well and helps to explain what they did and did not factor into the rating:
Conclusion
DNAPrint genomics holds unique technology in the emerging field of predictive genomics. We believe it is one of only a
few companies, public or private, capable of applying a cost-effective technology platform to this emerging field-and is
doing so with a steadily growing revenue stream from its commercialized products. However, in the Company’s intended target market of pharmacogenomics profile diagnostics, regulatory and potential ethical issues may arise as products in this area come to market and gain media attention. Without a doubt, pharmacogenomic profiling will be required as part of the overall battle against rising healthcare costs, but the timing of development of widespread demand for these products is as of yet, still in the midst of evolving FDA policy. In the meantime the Company will have to gain greater acceptance in the forensics market to generate revenues. Therefore, we rate DNAPrint genomics shares as a Speculative Buy.
Whadayatink?
Later,
W2P
