First this is by no means exact, but more back of the envelope to help answer your question..
So if you assume for 2013 -2015 the company spends:
8 million per year SG&A 5 million per year on R&D efforts 5 million per year for early stage trials
They would need $54 million to get through 2015.
Now add to that the cost of 63 phase 3 if going it alone, call it $50 million.
This would mean the company would need to come up with funding of something on the order of $104 million.
I'm excluding warrants to keep this simple and more conservative, if there are 110 million shares outsanding which get reverse split at 6 for 1 the stock price would increase to roughly 3.40 and reduce the outstanding shares to roughly 18 million shares.
If the company prices a secondary at say 3.50 they would need to issue an additional roughly 30 million shares to get the $104 million which would put the outstanding count at roughly 50 million.
If 63 is able to generate revenue of say 800 million a year (pretty similar to dapto), and the company sells at a 2x sales multiple it would value the company at roughly $1.6 billion (or roughly $6.40 a share) or an upside of about $3 per share post RS (roughly $0.50 pre RS). Put in a risk fact or and we're probably about $0.20 below fair value in my opinion so I think your right (not even taking 56 into consideration at all)..
So yes I think from here there is good upside (but also a lot of risks/unknowns), but I still like the company and have added a little to my position on this weakness. I'm now long 18k shares at an average of just over $0.70
>>> outstanding shares to roughly 18 million shares... issue an additional roughly 30 million shares to get the $104 million <<<
If shares outstanding post-split are 18 mil shares, you can't issue more than 18 mil more shares in an equity financing without losing over 50% control of the company. That's one of the problems with doing equity financings after reverse splits. And when figuring beneficial shares that will be controlled by the financing entity, you also have to figure in the warrants attached to the deal.
The additional money could instead come from issuing debt, or preferably, from pharma partnership deals. If the stock price hadn't collapsed, they might have gotten significant cash proceeds from the exercising of existing warrants, but those are all underwater now.
So if I understand correctly poor man, you're analysis sees a $32 stock price with fairly conservative figures. This is what i'm talking about. Even with the dilution and even if poor man is off by a factor of 10, this is still a great investment, if the data plays out as it currently is...