bidger V2 board, I agree!Thoughts BioVex vs ONC/Y and 2011
"Oncolytics now has 69,873,568 shares issued and outstanding, and cash on hand and available for operations of approximately $48.7 million."
https://www.integratir.com/newsrelease.asp?news=2131024211&ticker=T.ONC&lang=EN&ny=on
ONC/Y is worth today about
.69/share cash value.
Now assume ONC/Y is valued the same as BioVex (just work with me here). BioVex will receive $425 million in cash from the Amgen deal. In terms of ONC/Y share value that works out to $6.08/share.
Valuation of the BioVex future milestone payments worth (dependent on progress/approval) $575 million, again in ONC/Y share value that works out to $8.23/share. However that $8.23 is paid out over period of time. Assuming in the ONC/Y case that would be about 2-1/2 years, putting this in terms of value added per day to ONC/Y shares works out to a shade under one cent per day (
.009/day). It does add up and come January 2012 the value is equal to $2.98/share.
OK, let's add up and see where we should be at the end of this year.
Cash ……………….
.69
BioVex equivalence $6.08
Future add on value $2.98
Total =
.69+$6.08+$2.98 = $9.75
Problematic in the above is while BioVex will not have much in releases of study results in 2011, ONC/Y will. In the past material results significantly increased share value. But today's biotech sector is a different beast and one can not be assured the spike on good news will hold beyond a few days. Yet it hard not to see if ONC/Y can produce 2-3 positive results there will be longer term positive impact on share value. Taking nothing more than a wag, $2.50 is my guess for 2011.
It may be just too simplistic adding the $2.50 of estimated 2011 results value to the $9.75 and expect to get to $12.25 at the end of the year. Can't forget ONC/Y does not have a product just potential value even at the end of 2011. The question then becomes how high can share value climb without a product or even approval. Not discussing hype at the moment rather a realistic value that can be arrived by analysis. Exelixis (EXEL) $9.89 and does not yet have approvals or any collaborations. So at least I have one example that confirms values can get to near $10/share by going it along and based on the company's pipeline potential. Maybe other public developmental bios that are going it alone breached the $10/share barrier, I have yet to find any.
Lastly the overall market in 2011 is expected to be rather flat, although you would not know it from the start we have had. So don't expect much in the way of help or hindrance from out side market pressures.
Summing it up, getting to $10/share in 2011 is doable, pushing beyond on evaluation is going to be much harder IMO. Then again you never know if and when ONC/Y catches the hype train and there are good reason ONC/Y just could hold one or more of those hyper tickets for the investor.
As always do your own due diligence,
bridger