Replies to post #87766 on Biotech Values

[mcbio]

Re: OGXI ISIS

Lets say OGXI gets $100M upfront, Isis take is $30M. Is that going to move their needle at a $1.B market cap? Whereas OGXI market cap is closer to $180M. So in a generous deal 3% of Isis market cap versus 40% for OGXI ($70M/$180M). So my conclusion would be Isis may be a safer way to play ogxi but it's still fairly insignificant to Isis.

Totally agree.

As far as OGXI, though, I think the easy money has been made. I first posted about OGXI about a year ago on here when it was trading around a $25 million market cap. See: #msg-33962459 . We had some good discussion about OGXI and, unfortunately, I decided not to invest. The market cap seemed way too cheap given what they had going on, but I just couldn't pull the trigger. I think a large part of the significant increase in market cap for OGXI has been due to the buyout of CGRB for its prostate cancer drug. I'm hoping my long position in CYCC will make up for my missed opportunity in OGXI. Totally different cancer drugs but similar in that there's some PoC, very, very tiny market cap, and appears to be under the radar at present time.

[wallstarb]

OGXI also has a lot more downside - so if you do a risk/reward analysis you need to determine how much downside there MAY be between now and then as well as if its a "disapointing" deal whats the downside.

If you only consider the upside it looks like OGXI may be a better trade. But risk adjusted our #'s show ISIS is a much better trade. (cant look at just market cap - adjust them for net cash) if you subtract out the cash from ISIS it's got a $350m "enterprise value" dilluted

OGXI has a $200m dilluted market cap when adjusted for cash - so the #'s arent quite different 200m vs 400m

so its not 3% vs 40% its more like 8% vs 30% - peopel that missed OGXI if it does run will clammor into ISIS

[turtlepower]

OGXI - I think downside is the main concern if they don't land a deal or if the terms are not good wrt to upfront payment. In some ways they are like ZIOP which was forced to do a massive dilution.