Hidden Gems

[DewDiligence]

Re: GTCB

OK, Dubi, here’s my handicapping of the outcomes price action from now until 5/1/06 (the date I used for the $4 price target if things go well):

1. GTCB is acquired by Pharming (or someone else) at a premium (say $3) before the EMEA’s opinion is rendered in early 2006: 6%.

2. Nothing happens on the M&A front, and the EMEA approves ATryn in early 2006, allowing for a mid-2006 product launch (and the $4 price target): 74%.

3. The EMEA fails to approve ATryn in early 2006 and no white knight steps in. GTC has to raise more capital on unfavorable terms, causing the share price to fall below $1 (say $0.50): 12%.

4. The EMEA fails to approve ATryn in early 2006, but Pharming (or someone else) offers to buy GTCB at a lower price than in case 1 (say $1.50): 8%.

--
If you do the arithmetic, the above works out to a weighted mean price of approximately $3.30 next May, which is why I think GTCB is a compelling buy at less than half that price.

JMHO, FWIW