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Biotech / Medical : AMLN (DIABETES DRUGS)

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To: D. Kim who wrote (953)	11/20/1997 12:37:00 PM
From: schadenfreude	Read Replies (2) of 2173

For the sake of argument, let's say that the Amylin product does become a $500 million product. The Barron's article estimates that this would net $2-3 per share to Amylin. With 32 million shares, thats $64-96 million. If this were true, Amlyin's stock is worth more than the current $7/share, but not a lot more. First, the earnings stream is about five years out since the drug won't be approved until 2000. And second, patent protection doesn't last forever--we're not talking about a perpetuity here. The company would of course be worth more if they have other products in the pipeline, but from what I've heard, this is a one-trick pony. If Barron's earnings estimates are true, then M Murphy's long-term projection of $100/share is all wet. I am missing something here? While the stock is down quite a bit from its highs and seems to be under pressure from year-end tax selling, I'm not sure the risk-reward relationship is favorable.

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