Biotech Values

[mcbio]

It’s a little early to be making those kinds of proclamations, IMHO. The fact that so many people are is what makes me think the stock might be overvalued.

As an aside, biotech investors in the aggregate routinely underestimate the probability of a *Bardoxolone-like safety signal that comes out of left field and derails a drug that seemed to have everything in its favor. This isn’t likely to happen to Ponatinib at such a late stage of development, but it can’t be ruled out entirely. (What would the stock be worth if something like that occurred?)

Spot on DD and completely agree. To me, it's not just a matter of how great a drug a company may potentially have, but it's to what extent such success is already priced in. At almost $4B market cap and likely a large extent of that attributed solely to ponatinib (and despite some questions of how the drug will fare with the advent of generic Gleevec), I don't think it's unreasonable at all to question upside here and potential downside in the event something goes wrong. If I'm going to play a biotech around this type of valuation, I'd prefer something like SGEN where you get a valuation supported by a massive pipeline underneath and not just supported by one or two drugs.