John, $.41 per share is a conservative valuation. According to the company's most recent 10-Q, excess cash is invested in interest-bearing instruments, and interest income is recorded.
With the settlement with Peprotech, additional cash of $718,000 has been received (about 2.5 cents per share). At an asked price of $.25, the company is selling for $7.3mm, on a fully diluted basis. Shareholder's equity was $11.3mm at 12/31/96, and has increased since then.
If you disregard the financial presentation, there should be over $10mm invested, or $.34 per share. At 5% interest (assuming very short T-bills) there would be a yield of 1.7 cents on your investment of a quarter, or 6.8% on the investment you make. As a valuation method, this overreaches the border between Conservative and Silly.
In addition, there is a business. At minimum, that includes funded research, an enlarged revenue stream from Peprotech, IMNX, and other royalties, a patent portfolio, and future payments from Immunex.
If nothing else, Cistron's cash and future cash flow present an attractive LBO target. |
