Chris, I still like Sang. However, profits are off in the future. Sales are increasing and costs of sales, as a %, are coming down to reflect that. But Sang is not sitting around fat, dumb and happy waiting for its current products to turn a profit. They are plowing the sales back into research on new drugs. They have enough cash to run for 18 months at the current burn, and my guess is that expenses will flatten while sales increase.
How do you evaluate them? Tough for small bios. You have to look at the current products, and they are gaining share. You have to assign a risk factor there, but that has declined since they settled the court battle (one of the reasons for the big losses). Then, you have to look at products in the pipeline and assign the risk of success with them. My calculations are that Sang has some huge numbers ahead of them if they have any success at all with the new products. At $12, the risk or this very risky stock seems to be overweighted and the reward potential is underfed.
Of course, this, like most small biotechs, is a speculation and I have always recommended buying them in a package of at least 5 issues to lessen the risk. One winner will pay if the other four are total losers. And two winners will put you on happy street. <g> |
