Replies to post #105902 on Biotech Values

[Rocky3]

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I think the share price is close to reflecting this consensus, but I don't think it is "more than priced in." I think if it plays out accordingly, we could see a drop to about $10 (it always overshoots; trot out your favorite conspiracy theory for why), before bouncing to $12 or so. Then, MNTA might slowly ramp up into the anticipated date of a Markman ruling, which now seems to be in the first half of next year.
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My views echo RockRats on likely trading pattern if Teva gets approval.

I am more pessimistic. Mr. Market over reacts. Upon T-En approval, I think 6-8 is very possible if not probable. The value of MNTA is then totally dependent on M-Cop and 118. The market will discount them big-time. MNTA would no longer be cash flow positive.

I was thinking about VPHM as a stock that has a similar "overhang". For VPHM, the overhang is approval of a generic Vancocin.

My first reaction was that they are not similar since VPHM already has another drug that is ramping up sales, but on reflection I agree that the overhang and the existance of other potential revenue do make them similar. And VPHM was trading way under 10 at the beginning of the year. I think that the overhang may last a long time (VPHM's was for several years), but will eventually go away.

I still am very long (and will be longer if it is under 14 next Friday) since I think that it is unlikely that T-en gets approved in the short/mid term. But if it does, I will probably head for the exits since I think that it be low for quite awhile.

JMO.