I used to think the same thing. I was long this stock too. Then I started putting all the pieces together regarding this company. And after being lied to by management and seeing them cover up so many things, I realized that there are lots of cockroaches swept under the rug with this co! Since you are a self-proclaimed "value guy" I am surprised that you are trying to make the case that this company, which by your own admission relies on the "possibility of selling an ingredient in chocolate for an exhorbitant amount" would be considered a "value play". The unrealistic valuation of Theobromine is another lie perpetrated by management to get the stock price up BEFORE they sell their shares. Worth "hundred of millions?" It simply isn't so, Do you always believe everything a tiny co's management claims? Thats why they have so many disclaimers to protect themselves. Small biotech companies are notorious hype artists. What evidence do you have that its worth "hundreds of millions" when they acquired the U.S. rights to the theobromine patent for a measly $500k only a few years ago. Does it pass the smell test that they could then turn around and sell it for hundreds of millions... I think not!
Obviously they have fed you a bunch of b.s. too.. You can't substantiate that value. Since I am in the industry, I have personally talked to many in the industry about what theobromine would be worth and best case scenario I come up with an absolute upper end value of $50m... But most said probably $25 million + earn-out, if it PASSES phase 3. Don't get me wrong that is still a nice return for PTX, if it comes to pass. To get $25-50m after investing only $500k would be a 12.5-25x return for them, which is astronomical. However, passing Phase 3 is still year or two away at best.
I didn't say it was undervalued, I said it was fairly valued. I don't what Theobromine is worth, but I am very sure JP Morgan would't waiste their time with it if they didn't think it was worth a lot more than $50mm. I am not pounding the table on the stock, but simply saying a good outcome on Theobromine would propel the stock much higher from here.