Biodel is probably the most undervalued stock on the market currently considering the upside potential both short and long term.
I'll be adding more shares tomorrow.
I put the downside to $2 down. Back to $2. Upside to $15.
This would be a good bet if the odds were even, but it's not. 5% approval, 95% delay, so the expected return is:
5% * $15 + 95% * $2 = $2.65. Sorry.
(1) 10% chance of outright approval = $20 pps.
(2) 45% chance of getting a CRL that requires new trials = $3.00 pps.
(3) 45% chance of getting a CRL that requires only clarification of existing data and can be approved within 3-6 months = $7.50 pps.
Expected value = (.10 x $20)+(.45 x $3.00)+(.45 x $7.50) = $6.72 pps.
It would appear the pps is way under valued at this price. Hmm...I think as we get closer and closer to the PDUFA date we will see a rapidly increasing trend toward $6.50 to $7.00 per share. JMHO