AML market is $1 billion/year.
Conservatively, if Voreloxin is approved, assume only 1/3 of market sales (at the moment, there are no FDA-approved drugs that are competing with SNSS).
Assume gross margins are only 70%, very conservative estimate in a sector where margins reach 90%.
To be even more conservative, lets not put any value on the ovarian cancer and lung cancer potential Sales. Lets just value the AML itself.
Assume operating expenses are $50 million/year (research and development, marketing, other drug trials, etc. This again is very conservative, given that operating cash flow was -$22 million last year.
That gives SNSS operating income of $185 million.
Add a P/E ratio of 20 on that, very conservative considering biotechs like GENZ have a multiple of 34,
WE HAVE A POTENTIAL MARKET CAP OF $3.7 BILLION, BEING VERY CONSERVATIVE WITH ESTIMATES, OR $16.82 stock.
Assume just a 50% chance of FDA approval, again very conservative if you look at the terrific final Phase II data presented by SNSS in June at ASCO. The company has had nothing but excellent data.
Now we have an expected value of $8.41 by 2012, when we can expect trials to be over and sales to be in gear.
Discount the $8.41 back a few years with a 20% discount rate (anyone holding the stock now would want a 20%+ return, given the risk, per year). That leaves us with about a $5 stock today!!!!
WE ARE CURRENTLY GROSSLY UNDERVALUED!
SNSS should be trading at $5 TODAY!!!!
lol!!! Man, you guy's really are sad! It will never see $5.00.
Why is no one else agreeing with you?
Remember, ALL traders lose money, at one point or another, that's a given, but the ones who are successful know how to take a loss, instead of riding the stock to zero.
I am long on snss but I keep hearing the stock is way undervalued but yet it remains at a very low price. If today it had more value it sure seems like nothing leading it to a higher price at this time