Biotech Values

[10nisman]

Wedbush probably expects MNTA to reverse the balance-sheet offset to the NOL’s and run the deferred-tax asset on the balance sheet through the income statement in one fell swoop, which will encourage the sell-side analysts to ignore this non-recurring gain and model EPS on a fully-taxed basis.

I would be very surprised if E&Y allows a complete reversal of the valuation allowance since there is enough uncertainty surrounding MNTA's ability to fully use the NOL's. I can understand modeling on a fully tax basis however does it really make sense when you expect the company to only have four quarters of positive income and the company's NOLs exceed the estimated total income? In addition, it appears Wedbush has understated the quarterly net cash flow balances in 2011 by their modeled estimated tax liability.

10nis