ABSC closed today at $4 3/8 a share. I know this isn't the best way to assess a company in the biotech arena, but in their last corporate report, ABSC notes total shareholders'equity at $54,364,072. In computing the diluted income or loss per share, the financial statement records 15,422,755 shares outstanding. Those figures indicate that each common share would then be worth $3.52 in shareholders equity. An additional $9M (as per the latest announcement) would add an additional $0.58 per share, or a new total of $4.10 in equity per share. Now, even assuming that I've read the report correctly, this doesn't account for the burn rate for developing and manufacturing the UHTSS technology, or for the effect of stock options... But, if you believe that they can deliver on the technology, doesn't it look as though ABSC is very cheap at $4 and change? My current view is that if the consortium of BMS, Eli Lilly, Warner Lambert etc didn't already have agreements in place concerning ABSC, that one of them big pharms would buy ABSC outright.
But in the $4 range, aren't we able to buy ABSC at cost, as it were? That is, you're paying only for the already established shareholders equity, and almost nothing for their proprietary knowledge--which is actually what would make a company like ABSC worth investing in.
Also: the report states that "Aurora expects to receive in excess of $100 million from the syndicate...for access to Aurora's portfolio of flourecent assay technologies etc etc..." (page 13.) If you assume that this is too optimistic, and also subtract some of that figure as already having been paid--let's say they only receive half of that amount--then another $3 to $4 a share flows in. So ABSC--if they can deliver the UHTSS (and so far, they're on track with syndicate members taking delivery of parts of the system as they develop)--is selling for half price.
Can anyone correct me if my thinking is way off here?
Best to all, hang onto your hats,
-Andy Patton |
