TPThe market cap to some extent reflects La Jolla Cove (LJC)...

TP

The market cap to some extent reflects La Jolla Cove (LJC) residual sentiment more than the actual dilution this arrangement caused.

MC hasn't shifted much in years ..... so pipeline advances have not been valued by the market at all. Bbefore we get to precious about this a look at the long term charts of some peer level biotechs tells the same story. Whenever there is a rally (eg ANP) long term retreat often follows until revenue is realised (or seen to be a very near term probability). CDY is in good company.

The low MC is viewed as a risk by institutional investors because it is perceived as an impediment to raising capital. At this level CDY must also demonstrate it's capacity to realised near term revenue.

A downside of CDY's MC is the need to farm in additional partnerships for programs like HU91. The company benchmark for comparison valuation is in the vicinity of $500m. There maybe be huge opportunity cost with a farm in but progress is is the abolute priority and we are where we are. If I were running the show I would also be seeking a suitable farm in partner.

Amongst all of this the market has very little understanding of biotechs with many short to medium term investors having no knowledge of what they are investing in and (unlike most of the regular poster here) little desire to learn. The failure of the market hits tiny operations like CDY very hard .... but from my perspective it also presents a rare opportunity for supernormal gains. From current levels, the first 3 or 4 bags are always the hardest to repeat.

Unlike oilers or goldies that don't find suffient commercial resource there have actually been very few micro biotech failures on the ASX. Everything on my watchlist (a few years old) is still churning along. Like CDY many will have supporters with money at the sidelines that doesn't show in the books.

So if Evolis sales can continue to exceed expectation AND if a commercial quantities of MK Elisas start shifting the icing on the cake would be Quest announcing the release of its NSCLC and mesothelioma tests. If everything goes to plan over the next 12 months CDY Market Cap concerns won't hang around.

cheers