I'm just starting research on the company, and have noticed the
recent price @$6/ADR which is down substantially from the summer
highs of about $11. Much of this I'm sure is attributable to the
market collapse of recent, but I also wonder how much can be
attributed the stock getting ahead of itself at $11 to begin with.
It doesn't appear to me that revenues will start to flow until 1999,
if the company keeps on track with the Glaxo project. I have no
doubts that it will given Glaxo's reputation and commitmements. But
even then, Biota is entitled to only 6% of global revs. Outside of
the flu products, there doesn't appear to be products in the pipeline
transitioning to phase II or III status.
There is also going to be a share dilution, if I understand
correctly, of an additional 6.6m shares. This shouldn't be a problem
theoretically if the new capital proportionally contributes to
shareholder value.
Please don't get me wrong, I'm not putting Biota down. At first
glance it looks like good value at a $130-140m market cap. I'm just
trying to understand it. Obviously, there is a lot of intellectual
property being valued in BTA stock and I want to get comfortable with
it. Good luck to all. cm |
