Biotech Values

[Rocky3]

the sad thing is even with multiple generics, we are looking at around 10-15 P/E for a company that has tremendous opportunities ahead.

I think that you are being a little optimistic, or at least I am much more pessimistic.

With mutiple generics, I'm not sure there is any net income, let alone a low p/e.

My (pessimistic) assumptions:

total market - $1.5B
NVS/MNTA share 33% - $.5B
MNTA royalty 12% - $60MM (after repayment to NVS is over, which is sooner and sooner)

$60MM is about the annual loss now, so no net income.

Others views appreciated.

Don't get me wrong - I am very long now (plus still selling puts), but that is based on my hope that there are no other generics. Once the NVS reductions are over, the number of income is around $300MM/yr. Until the tax lossses are used, that is $6/sh/yr. Not too shabby. But the market needs to get some history behind it. By Q2 '11, the market should put at least a 6 p/e on the $6 '11 estimate for a 36 price. I'm willing to take that gamble.