fusion investing fund buys biota

July 20, 2009 10:02 am by Dean Morel Better late than never, as they say. I hope “they” are right in this instance.

The Fusion Investing Fund just bought 60,000 shares in Biota Holding Ltd (ASX:BTA) at $1.58. Due to the near term risks associated with GSK announcing Relenza sales on 22 July and Daiichi Sankyo announcing LANI results within weeks the fund is buying a half position.

The GSK Relenza announcement could disappoint the market after the stunning Q1 result. However, if that occurs it may result in a short term buying opportunity as the medium term sales of Relenza should be very strong. One of the few things I am sure about is that I have no idea how the market will react to either the GSK Relenza or LANI results. The Relenza results may disappoint as GSK only had around 6M courses available and limited manufacturing capacity. I’ll be most focused on what GSK say about future capacity.

LANI. I treat this as a free call embedded within Biota. The market is not currently fairly valuing Biota’s probable Relenza income stream, let alone ascribing any value to LANI. Though as I said I have no idea how the market will react if LANI results are bad. If they’re good I’d imagine a good bump for Biota.

More analysis and commentary on Biota.

Disclosure: I own Biota in a couple different accounts. My cost price is around $0.40 and my initial sell price was $1.80. My new target price is considerably higher, but that could change over the next few weeks.

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