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Gold/Mining/Energy : Nuvo Research Inc -- Ignore unavailable to you. Want to Upgrade?

To: Montana Wildhack who wrote (8715)	2/11/2002 9:27:13 AM
From: Cal Gary	Read Replies (1) \| Respond to of 14101

Wolf care to quantify a guess as to the impact would have been if that Thursday NR had been an approval 1. The valuation approach Assumptions all Canadian: a) 30mm population b) 10% or 3mm are OA patients c) $60 / 60ml bottle selling price per month supply d) COGS 50%, or Net Rev 50% e) 45mm shares o/s f) expectd PE ratios = 30x For every 1% market share captured the answer is $0.24 earnings per share $7.20 share price component For a 5% market share captured the answer is 5x or $1.20 earnings per share $36 share price at 5%market share Given that Pennsaid Phase IV, there are more than 3,400 canadians who already used Pennsaid. Assume status quo, there is an immediate 3,400 customers on day 1 or roughly 10% of the 30k people needed to capture 1% of the market. Thereforem, under this approach, I would use the $7.20 number and discount it for a portion of 1% market share that can be garnered upon approval, in year 1. Given dismal sales results in UK but encouraged by Phase IV numbers, I guess the HC premium or HC catch up should be up to $3.60 max (50% on catchup)and DMX share price around the $8.60 - $9.60 level and stick. Then it'll move another $3.60 when shareholders anticipate future value of earnings to capture just 1% market share. 2. Comparative model I'll use HML. a) It has about 40mm shares o/s. Comparable to DMX. b) Currently waiting for HC marketing approval. Comparable to DMX. c) every time an HC rumour, jumps to $9.00 d) when rumour doesnot come thru, drifts back to high $6.xx Differences e) HML does not have FDA "marketing" approval "around the corner" yet. f) I could be wrong here, HML does not have another major candidate in phase III. Therefore, under this approach, I would guess HC premium should be $3.00 max and DMX share price around the $8.00 - $9.00 level and stick. I stand correction on any of the assumptions. Hmm, please do correct. All comers. F.D.A.eh!!