Nuvo Pharmaceuticals Inc NRIFF

are we worth 1/68 of Wyeth??

[3dollar]

Ok so i am making some assumptions here and rounding numbers off for simplicity.  Here is the question, is Nuvo worth 1/68 of what the market is telling us Wyeth is worth??  Wyeth is being bought by Pfizer for $68b.  Wyeth generates roughly 4.33b in earnings annually.  Aftert all warrants and options are exercised Nuvo has roughly 500m shares outstanding.  A billion dollar market cap or 1/68 of what Wyeth is worth would be equivalent to $2/sh.  To be in line with the market value of Wyeth this would mean Nuvo would have to generate earnings of $65m.

Here's the math

Wyeth earnings are $4.3b
1/68 is equivalent to 1.5%
1.5% of $4.3B= $64,500,000

So does anyone see Pennsaid generating earnings of $65m??  I'm not saying in the next 18 months but in the next 3-5yrs??  Would a prospective buyer be willing to fork out $1b for the future of Pennsaid sales and its accompanying technology?  I don't see it as being that far fetched.  For Nuvo to make $65m in earning Pennsaid would have to sell roughly $250-$300m (assumes a royalty retention of roughly 1/3 on all US Pennsaid sales and the current Nuvo cost structure stays in tact).  This also represents a 4-5 year return on investment for the buyer and of course this does not take into consideration any other uses for the technology and Pennsaid Plus.  I'm sure they look for better returns than that when buying companies but in today's market with limited pipelines this could happen.

Hopefully this is not all wishful thinking.