Biotech Values

[DewDiligence]

ARIA strikes me as a potentially profitable short. Reasons:

• The enterprise value is a whopping $1.5B (fully-diluted).

• Even knowledgeable posters claim that Ponatinib is a “lock” for FDA approval based on interim data, so hugely bullish expectations are already baked in.

• The CEO is untrustworthy and has a propensity for pumping that goes beyond what you typically see for a small biotech.

• At least one and possibly two generic competitors for Ponatinib will be on the market in the next few years.

• Expensive cancer drugs for niche markets are, by and large, a bad business proposition; they will be among the easiest targets for government-mandated price controls in the US (and around the world).

Feedback welcome.