daytrade diaries... wednesday, page-116

BTA is a situation where traders have purchased at higher prices & are now electing to take their losses & move on. Perhaps it is worth a little research on BTA before moving on.
At $1.40 BTA has a Market Cap of $244.4m with approximately $55m cash (last December). The royalty revenues for Relenza are extremely variable in the the previous 6 months in 2007 $16.4 m cf 3.8 m in last 6 months to Dec. 2008. But surprisingly the last quarter revenue till Mar was $36.1 m thanks to orders from UK & Japan. Given the current situation we can expect next quarter royalties to also be higher given not all these royalties relating to UK & japan have been booked to BTA.
GSK has announced it is increasing production of Relenza & it would seem there is emerging evidence Relenza is superior to Tamiflu due to emerging resistance to Tamilfu (Page 2 Dec. Half Report). Many countries carry far higher levels of Tamiflu & will be looking to rebalance their anti-viral stockpiles.
No one can guess how long this swine flu will last but we do know Governments are going to be restocking & placing additional orders over the next 12-18 months.
Try doubling or tripling the last quarterly revenue & you come up with royalties of $72.2m or $108.3m for a quarter. It won't happen this quarter but it may happen in the not too distant future.
Unfortunately traders will behaviour like sheep & drive BTA lower while its fundamentals improve.
I expect in the short term the smart investors will rediscover BTA at good value, given the current situation.
Regards
Buffett
PS Worth readsing recent ASX announcements for fuller details on royalties etc.