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Ampio Pharmaceuticals, Inc. Message Board

  • sirmichael222 sirmichael222 Apr 30, 2013 1:13 AM Flag

    My current opinion on AMPE

    In my opinion AMPE is DRAMATICALLY undervalued. The facts came together in a compelling way about three months ago. Accumulation has been underway since then. Look at the chart for the last ten weeks—relentless upward bias. Actual anticipatory current value is about $400.00. Stock should be selling around $40.00. Within three to five years the actual value should be around $4,000.00. The big money people will never let us enjoy that capitalization, however. They will use their clout to take over whatever they want—individual drugs one by one or the whole company. We may get about $40.00 or even $100.00 if there is a bidding war.

    Sentiment: Strong Buy

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    • PART 1 - (sorry this is in two parts)

      For what its worth, here is my assessment of the current valuation of AMPE and its future prospects in the near term - and the basis for my holding over 100,000 shares. I am basing this on a few very critical assumptions, at least one of which is not true.

      The first assumption is AMPE’s current proper valuation assuming it was fully vetted and supported by a significant investment banking house – which is currently not true.

      Without going through the detail of the comparable companies, their drugs, stages of development, addressable market, and market valuations at the time, a reasonable (and conservative) current valuation for AMPE would be in the range of $300M to $400M market cap. (This translates into $7.50 to $10.50 per share).

      Assuming positive interim results from Ampion in the third quarter (no reason to think the drug would work in Australia and not the US), the valuation should range from $600M to $1B ($15 to $25 per share). Upon Ampion approval (assume 2014) we should be looking at a $1.5B to $2B market cap ($38 to $50 per share).

      Any positive results from Optina in the interim – let’s assume positive interim results in the third quarter – and you can conservatively add another $400M to the valuation, making it $25 to $35 per share in Q3. An Optina approval in 2014 would result in a total market cap in the neighborhood of $3B+ ($75+ per share).

      A Zertane deal, NCE001 progress and Louxis funding and test results could easily add another $200M to $400M in market cap (another $5 to $10 per share) making the total, reasonable and conservative valuation of $80+ per share (or $12.50 to $15 prior to any trial results). A significant Zertane deal could be worth much more (dream about Pfizer picking up Zertane and ZertaneED for its Viagra follow-on and with significant royalties to AMPE).

      Continued in PART 2 -

      • 2 Replies to th3k33p3r24
      • I have a very similar assessment and you are completely right about how undervalued this stock currently is! If they even come close to the billions these drugs could produce, this fair market value could be gigantic to the upside in the $40 to $80 dollar range in the next 2 years! I'm aggressively adding to my current position at these prices. Thanks to the shorts from the institutions for my buying opportunity!

        Sentiment: Strong Buy

      • PART 2 -

        There are SO MANY variables here that this analysis may border on the absurd, and I am sure there are many who will scoff and point out many real or imagined faults. However, I doubt anyone can point to ANY stock, ANYwhere, that has such a reasonable chance to provide a 20X return in 12 to 18 months.

        It also makes me wonder whether it makes sense for the company to do an offering now (or in the very near future). Assuming 6M shares at $5 or $6 (if that is enough to garner the interest of a significant bank), the result would be less than a 20% dilution, but could result in coverage that could provide for a 50% or more increase in per share valuation – not to mention an additional $30M. Certainly a trade off, but one that is worth looking at. I’d rather have an additional $30M in cash and a 20% dilution on an $80 stock, than no $$ in the bank and a $50 stock.

 
AMPE
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