However, in Pharmos' case, any analyst could set whatever price target he chooses; quantifying the company's potential is challenging indeed.
Pharmos is working on discovering, developing and commercializing "novel therapeutics" for inflammatory and neurological conditions, based on cannabinoids. Its flagship neuroprotective product is dexanabinol, which is undergoing testing as a treatment for traumatic brain injury, and as a preventative agent against post-surgical cognitive impairment, the company explains.
"Bouchay probably wanted to set a target of $10, but settled for $6. Why, do you think that's high?" Aviv commented after the analyst's report was released. Bouchay had met with Pharmos' management two weeks ago, Aviv related.
When Aviv says $6 is too modest a target, he's thinking about Pharmos' particularly speculative story. The entire company is built on dexanabinol at this stage; if the development succeeds, its market could be a billion dollars a year.
Bouchay estimates that the clinical trials will end in early 2004, but the final results will only be in by the fourth quarter of that year. Pharmos will be in a position to file a new drug application with the United States Food and Drug Administration in the third quarter of 2005, Bouchay figures. Some time after the final test results are in, Pharmos will probably try to team up with a strategic partner. |
