Let's do some math:
$50M sales for drug 1 (being discounted currently)
$75M sales for drug 2 (approved)
$125M in yearly sales
people use 7x sales --> market cap conversion, but to be more conservative let's say 5.5x
5.5*125M = 687.5M
Current market cap at current price of $3.60/share = $88.44M
687.5/88.44*3.60 = $27.98/share. If you want to factor in a potential future dilution, it would be closer to $20.00/share.
That sounds high now but keep in mind that this was even using a number that is more conservative than I could have, as "expected value" is all that's worth considering. I think 7x sales is probably "best case" so I choose not to get all dreamy about that possible scenario. 5.5x is probably much closer to what will happen.
They also said that when Silenor of Somaxon got approval.....
look where the stock is now....$0.56, coming from $10.
DSCO is out of cash, sales will be very modest and not earlier than in 2013.....do the math....
Yeah do the math:
Products (Surfaxin and Aerosurf) coming to market in late 2012 so revenues in 2012, cash on hand now at aroung 30 million$.
So do the reading and then the math, but for a brainless basher that are two tasks to hard to accomplish.
Due to all the short term traders currently holding the stock and the weak markets we may not see a high spike tomorrow. But:
- like you said higher market cap is justified due to approved products and pipeline
- institutional investors are so far only a minority of shareholders, so with interest picking up they will add to or initiate new holdings
- there is always the possibility of a partnership or buyout
I think the declining market trend is actually a reason for investors to get into a stock that logically should have almost no correlation with the Dow or S&P.
At anything under $10 this is a very strong buy. That's half of my conservative estimate and investors may see a 100% from there.