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Biotech / Medical : ATIS is on the move! -- Ignore unavailable to you. Want to Upgrade?

To: David S. who wrote (1205)	12/9/1997 10:36:00 AM
From: Harry D. Kramer	Read Replies (1) \| Respond to of 2205

David, are you really trying to value biotech companies, that have just entered the commercialization stage, on their current revenues??? If so, how would you explain the case of IMNX. The stock has gone from a market cap of $500 million to more than $2.2 billion in less than a year. This move was largely based on positive market expectations for Enbrel, a rheumatoid arthritis drug, that at that time was still in clinical trials. So this stock adds more than $1.5 billion in market cap for a product with ZERO current revenues. Don't get me wrong, I do not know whether IMNX is worth the $2.2 billion, but it's just a good example of how to or how not to value a biotech stock. And this is only one example, there are a lot more out there. Discounted future cash flows is all that matters. Current revenues, especially at this stage, are useless. They may, however, include information that can help you project future revenue growth. So if you are able to project revenue growth for the two companies solely on the information you presented, then you are definitely a genius. I am unable to do that, and I need a lot more information to figure out what a biotech stock might be worth. I do, however, agree that ATIS is not undervalued. Maybe we can agree on that one. But I have said this several times before on this thread. If you have information that implies that Dermagraft may not be a successful therapeutic product for diabetic foot ulcers, then please share this information with us. I myself do not have such an information, and without that I would not change my mind on fair value of ATIS. Regards, Harry