Replies to post #110348 on Biotech Values

[DewDiligence]

There are shades of gray based on how conservatively management wants to manage the balance sheet. I direct you to Craig Wheeler’s admonition on the 3Q10 CC (#msg-56166824):

“Before I turn it over to Rick Shea to provide a financial update, I want to mention that despite the fact that we have a launch product generating substantial cash flow, we still intend to manage our finances conservatively… At Momenta, we have every intention to build on our track record of achievement while maintaining financial discipline.”

[jq1234]

But if they have high confidence of being sole generic...

This is the most common sentiment on every message board when a company decides to raise money. The logic is the same in all circumstances: if the company were confident about trial result, they wouldn't have raised money; if the company were confident about FDA approval, they wouldn't have raised money; if the company were confident about xxxx..... The fact is no matter how confident the company is about anything, they can't be 100% sure about these things. It's about managing risk. Even if you are sure about something 90% - not many things in biotech come close to 90% sure thing IMO - you still have to manage the 10% risk. It's called prudence, for a company or for individual.