In reading the very pro CADX article written by TheStreet.com on January 19th, they say that under positive circumstances and full approval, the company might see earnings per share of $1.50 per share in another 2 years. If you look at PE ratios of most real companies with real earnings in the drug world, they range from 10-15 on average. That puts this stock best-case at $15 to $22.50 in several years. I am long the stock (with a protective put) but I have read posts of people who think it will have a big jump if the drug is approved. It seems to me that anything above $13 or so would be a surprise. Just curious if others have have read TheStreet.coms article have a different opinion :-).
Just over 2 years ago the stock hang around 14, so I think it should get close to that in the short term. Obviously, its in better shape for an approval now than then. So I don't see why it shouldn't be higher 14 after approval.
Those calculations don't account for investor emotion. If emotion wasn't part of trading then no one would ever make any money because the markets would be perfectly priced all the time. Emotion will take this higher (or lower) than the math says it should.