shylock - where are you?, page-5

Terry,
I understand what your saying, but unless the potential cash-flows from Extract are similar in size, timing & risk to cash-flows from Biota, then its difficult to draw a comparison.

I see Relenza future cash-flows as being worth around the $2 mark. The market seems to be pricing in that Rotohaler will not get approval, which wil diminsh the Relenza value somewhat. I would then see it as being worth $1.50. Let's be conservative and say it's worth $1.25.

We have 50c in cash. Thats $1.75 there.

Then to take into account Lani. I believe a good deal will be struck for Lani. Lani should experience strong uptake, its simply an extension and improvement of a known class of drugs. It appears to overcome the issues associated with relenza by only requiring 1 dose per week. Everything points to Lani being a significant % of future stockpiling.

We have to take into account that we will be sharing royalties with DS which diminishes the value. Lani would still be worth at least $1 to Biota, without pricing in blue sky. That leaves us at $2.75 as a 'fair price' without pricing in blue sky.

Currently $2.22, well thats why I have bought more today. Strong margin of safety and we are getting the blue sky for free. No need to worry, the market will re-rate the value of cash-flows heading Biota's way, they just need more claficiation of the quantity of these cash-flows.

We will find out in February whether our faith has been mis-placed, but a strong quarter should be in order.