I still think we have a long ride upward on DSCO.
With this last round of Private Placement Financing, my estimate of outstanding shares is ~ 18 million, most of which are held by insiders and a good number of which are restricted. They now have NO debt (Thanks to the J&J stake) and close to 20 million in the bank to fund the remaining phases of their current clinical trials.
Surfaxin, their most promising candidate for imminent FDA approval has been designated Fast Track Approval status by the FDA in 2 of the 3 current clinical trials. This means there are currently no drugs available for these diseases and FDA approval could easily lead to nearly 100% penetration into these markets. The market for MAS (Meconium Aspiration Syndrome) is large (26,000 patients/year), but the market for ARDS (Adult or Acute Respiratory Distress Syndrome) is huge (150,000 US patients/year). To give you a idea about the potential revenues, Survanta, a product made from extract of calf lung costs about $100/ounce and a baby typically is treated with one 8 ounce vial. Because of the DSCO's patented lavage technique, it would take at least 16-32 ounces of Surfaxin to treat a baby with MAS, and 100's of ounces to treat 1 adult (Due to the much larger lung size) with ARDS. You do the math, we're talking BIG BUCKS. Remember also, DSCO already has a European company poised and ready to distribute Surfaxin to THAT market as well.
Even with the recent dilution, DSCO is still in the low range of valuation for similar companies:
Stock Market Cap 52 wk High MC (in million$)
DSCO 144 180
IMNR 311 514
ALLP 622 950
Hope this info proves helpful
Frank |
