Biotech Values

[mcbio]

Re: PARD

I've been holding since ASCO but wanted to know if anyone else is on PARD and what they think the chances are of success in the trial. The company seems extremely undervalued at this point though it only has about 45 mil in cash. What impresses me is that management has not diluted yet despite the shortage in cash and is steadfastly waiting for trial results to either strike a partnership deal or dilute.

Turtle, I don't have a position in PARD and honestly haven't followed the company too closely. But I will say that it looks extremely risky to me at this stage of the game. They effectively are banking everything on one drug (I didn't see anything else in their pipeline). It looks like they are trying to develop picoplatin for several different cancer indications but, again, it's still just one drug that the company is hinging their entire hope on. And at this point, if you're going to be long for an extended time period, you have to hope for positive Phase 3 results for that one drug. That's a risky proposition in any situation, but much more so when that one drug represents the fate of the entire company. It looks like the market cap is around $250 million and, quite frankly, I'd prefer a much greater reward (i.e. much lower market cap, preferably sub-$100 million) given the enormous amount of risk you're taking on right now. It may pay off, and again I haven't followed the company closely, but normally I'd want to see a much better risk-reward given the entire dependence on one drug coming up on a binary Phase 3 event with very little cash.

How high do you see the market cap going if they show success in the Phase 3 2nd line SCLC trial? Conversely, what would you envision the market cap to be in the event of failure?