Replies to post #255632 on Biotech Values

[dewophile]

So arbs typically underprice spinouts and cvr's because they have no interest in them. But even so, the lack of any apparent premium for these cvr's tells me the asset just isn't given much value as it sits.

Agree it is always difficult to use a CVR to ascertain the value of an asset but can still be a worthwhile exercise. however in this particular case the cvr is puny relative to the buyout price, and it is years out versus months out. So here using the CVR as any reflection of the value of the asset is even more flawed than usual where it is a meaningful percent of the purchase price and the potential payday is much sooner. So in this case my opinion is that most of the value of the asset was baked into the purchase price. they paid a 33 percent premium - maybe 3 percent was due to the kit inhibitor, maybe 30 percent, we have no clue. I don't think it is zero or de minimus which is what the lack of any premium on the buyout for the CVR would insinuate that is all.

Sure thing. You don't suppose having two P3's reading out next year after strong P2 results has anything to do with that, do you?

no need to be snarky I know CLDX is much further along. I wanted to point out why your proxy for valuing ENTA's kit inhibitor is also subject to a lot of guesswork, perhaps even more so than comparing a preclinical candidate going through IND enabling to one in phase 3 but where we actually know the market value of one of the assets