V1:
Thanks. My point was not that I was making great calls on an ongoing basis, but that I am very, very careful before bringing an idea to this sacred thread.
- g -
ICOS short..... I convinced Mike K. to cover at 19. Old farts enjoy good sex too, and I feel that Lilly is dead set on taking 95% of market share from Pfizer. If anything goes awry with that program, it's back to 15. However, as long as phase III continues without concern, then a market cap of $1.5-2 billion is fine, IMO. I would have covered when it got clocked, but I think that Dave's resolve is cool too.
Price to sales for MRK is about 6, and it's 7.3 for BMY. Let's use 6...... 50% of the venture is Lilly's. That means that the PDE5 inhibitor would need to do 600K for a market cap of $1.8 billion, all other things equal or valuation from Lilly's perspective. How hard it will be for Lilly to market the stuff if there's a label advantage over Viagra? They'll need to name it and *poof*. That is, ICOS is fairly valued on that program alone, if you assume modest success. If you assume wild success of that program alone, then it's a bargain.
Lottsa downside risk in assuming success, of course. However, there's a breadth of projects and a good infrastructure that has good value. LeukArrest..... the fact that the study hit two secondary endpoints is highly indicative, to me, that MI, MS or stroke will look good. I feel that it's a mistake to pursue ARDS, to go after the subset.
You know me.... during this insane period, I've believed that ICOS was the only biotech with a sane valuation. The research premiums attached to the sector are insanely low. Nonetheless, while I wouldn't be short, there are lots of better bargains.
Cheers! Rick |
