future earnings now take over mcap, page-44

Hi champ,

You may have to do some research on Biota and then you will realise that this company is quite succesfull for a small Biotech on the ASX

First of all I am not sure if you understand the meaning of Marketcap of a company.

The Mcap or Market capitisation of a company is the amount of outstanding shares x shareprice

so in Biota we have around 175 Million shares
at a share price of say $1.60 x 175 million shares = Mcap of $280 Million


The share price itself is made up out of cash in the bank, profits, future profit outlook, number of shares on issue ect.

Biota has nearly $100 Million in the bank
Not bad at all for a small Biotech.

It has a number of good products in the pipeline of which some are partnered off and pay royalties to Biota for certain milestone achievements.


Relenza is now the big money spinner which will earn Biota in the next few years more then its total Mcap.

And remember they have alread around the $100 million in the bank!!!

So the the 175 million shares carry already around 57 cts for each share in cash. ( the amount they have in the bank)

At a share price of say $1.60 that means that only $1.03 per share has been put aside for:

All future relenza earnings ( which could be $300 million plus)
All the future earnings from our new block buster LANI (if its is going to be succesfull)

All the other products that Biota has in the pipeline.

Remember Biota has no debt outstanding.

If you add all the above up and you look at Relenza earnings alone you will probably realise that this company need a higher Mcap to justify its future earnings.

Hope this helps

jojo