action soon? Nice little price rise from around 8 cents to 11...

action soon? Nice little price rise from around 8 cents to 11 cents. Maybe it's to do with speculation about possible institutional interest because of the conversion of options to shares.

Maybe the price rise is due to recognition by the market of the potential Solbec has, and the upcoming phase 2 trials. So there could be more share price action soon.

I did a Net Present Value analysis just to get a feel for the company value.
My assumptions were that there would be a share placement this year, and the no of shares would rise to 200 million. For operating expenses I assumed $6m this year rising to $15m by 2012. I used a discount rate of 10%. For income I assumed royalty payments totalling $20m over three years (2007, 2008, & 2009), therefater I assumed SBP received 10% of drug sales, with sales of $150m in 2010 rsing to $650m by 2012.

The result was a NPV of approx 20 cents per share, adjusting this for risk of success, say at present a 40% chance of success, and I got a share price of 8 cents. The NPV for next year rose to 36 cents, and using a 60% chance of success I got a target SP of 20 cents.

By 2012 I was assuming SBP would on a P/E ratio of 8, and a share price of $1.25.

To me it seems SBP is still in the cheap range. So I continue to hold them.

My figures are based on my own assumptions, and not on any facts, so don't use my figures as reasons for buying shares - do you own research. If the company is unsuccessful in developing marketable drugs, then it's worth next to nothing.


Best of luck.

Regards

TDF