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Biotech / Medical : Calypte Biomedical Corporation (CALY)
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To: Gurupup who wrote (168)10/22/1997 1:21:00 AM
From: Clayleas  Read Replies (1) of 381
 
To all: I've run a few numbers based on this deal and they support what Skip is saying.

Based on today's closing price of $5.25 and the new outstanding of 13.1MM shares, the market cap for CALY is $68.7MM and that includes $10MM new cash (est. $12MM cash total).

As a basis for comparison, I looked at the company in the first half of this year (1H97). During that period, the stock traded in a range of $6-$8 (use $7) giving a total market cap of $73.5MM or about $5MM more than current.

Now there are 2 adjustments that have to be made to give the equivalent of the CALY we have today.

- First, the company had on average about $6MM less cash in 1H97 than it has now. So I will add that in, giving $79.5MM.

- Second, and even more significanly, the company in 1H97 had not yet gained FDA approval for the Cambridge confirmatory test. Based on the market movement after the FDA gave its approval, I would put the value of the approval at about $21MM ($2 per share X 10.5MM shares). Adding the $21MM gives us $100.5MM total market cap for the equivalent of today's CALY.

If the stock was fairly valued in 1H97, then using the current share count of 13.1MM, I would therefore expect the stock to be fairly valued now at about $7.50 ($100.5/13.1MM shares = $7.67, discounted a bit to account for the need to get FDA labelling approval).

This is not a recommendation to buy. As usual, do your own DD. I welcome any comments on this analysis.

Jim
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