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Biotech / Medical : Biotech Valuation

CRSP 55.11

-2.6%

Nov 7 9:30 AM EST

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To: Biomaven who wrote (7792)	1/22/2003 2:39:28 PM
From: Biomaven	Read Replies (3) of 52153

I feel I should preface this with a "don't try this at home" warning sticker. Every so often my speculative instinct gets the better of me and I take a small fling on a lost cause - sometimes (but not usually) it has even worked out well. Lynx recently underwent a 7:1 reverse split. Amazingly, it's been a reverse 400-bagger - it traded at $100 at its peak in Feb 2000 and traded as low as $0.25 (pre-split), which corresponds to about where it is now at it's post-split $1.80. Its market cap is currently only about $8m. It's in about the most unpopular sector of the biotech market - money-losing functional genomics. But it's got some neat technology and it's also not that far from breakeven based on their Q3 forecast: Lynx estimates that it can achieve operating results approaching breakeven for the fourth quarter of 2002 and positive operating results for fiscal year 2003. Lynx believes that it can achieve cash flow neutrality in the fourth quarter of 2002 and overall growth in its cash position during the year 2003, although quarter-to-quarter variability in cash flows may occur... It's trading at about half of forecast 2002 revenues: For fiscal year 2002, Lynx estimates that its revenues will be in the range of approximately $19 to 20 million for its genomics business. For fiscal year 2003, Lynx estimates that it can grow its aggregate genomics revenues by at least 50% over the estimated aggregate 2002 levels. They should have just about enough cash to last until cash-flow positive if things go approximately as forecast. Now I can't say I've done that much DD here - my interest was triggered by the reverse split, which many shareholders take as a sign to dump the stock. Most companies that perform reverse-splits of course go on to die horribly - but that's because they were miserable companies to begin with, not because they did a reverse. Anyhow I bought a little recently, at an average of about $1.95. (Symbol is temporarily LYNXD). Anyone follow them? Peter

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