John,
Part of the beauty of analyzing this stock is that the balance sheet is so simple. Of CIST's current $17.67 million in assets, the complany values its patents on its books at $5,076: prop and equipment is valued at $27,869. The remainder of the assets is cash or will be cash (i.e. $17 + mil). The liabilities are at ~$5 mil consisting primarily of future payouts to lawyers and univerity, and future tax burden. That leaves CIST with ~12 mil in equity which, again, is cash or future cash. Note that this balance sheet does not include future revenues from R&D systems, Peprotech lawsuit, or future tax benefit which may be available.
Historically the revenues of the company have been at about $1 mil recently. The company has not gained or lost a significant amount of money from quarter to quarter (i.e. +/- $0.01 share?). Keep in mind the revenue recorded was before the IL-1 patent dispute was settled, and anyone who wants to sell IL-1 now needs to pay Cistron.
I've been paging through my scientific journals and have been amazed at how many different reagent companies sell IL-1b. I don't see any reason why CIST can't get a few more people on board to help ramp up sales to the $3 mil range annually. This shouldn't be too much of a stretch given that they have patent and a bunch of seasoned lawyers familiar with IL-1 on hand.
The best thing about CIST, IMO, is that all their other research-- IL-1 assay for periodontal disease, PAI-2 inhibitor with Australia biotech, ICE (interleukin converting enzyme) assay, Sandoz agreement, and academic alliances are carrying no value. Check that--negative value! (based on current market price).
I wonder what a healthy biotech company in need of little cash might be willing to pay for the CIST package as outlined above.
Regards,
Layman |
