BioBlogger_

BioCryst Receives Fast-Track Status for Peramivir, But Does It Justify The Stock's Appreciation? (BCRX)

The market does have the potential to be significant; however, I argue that the current valuation not only reflects that potential but implies that that potential will be realized with certainty.

BioCryst and Avian Flu: Underappreciated Call Option or Just Overhyped? (BCRX)

Hey, skepticjr, thanks for the post. No Stuart MacKenzie quotes? Oh well, I will address your question anyway. In my opinion, the hype over avian flu has reached a fever pitch and the upside left in these stocks is merely speculative. In other words, these stocks could see more appreciation as the flu season ramps up and as more cases of avian flu emerge; however, the valuations of these stocks already price in unreasonable expectations. This holds true for QDEL. For example, QDEL trades at 135x EV/TTM EBIT whereas its comps are trading around 30x.

Although overvalued, QDEL could, however, experience further appreciation. I went back and looked at how the stock performed from 1999 through 2004 (1999-00 was the first flu season for QDEL's QuickVue influenza test). The median stock price movement from the end of March as the flu season wound down to the peak during the next season was 87% (average was 158%). I looked at how the stock historically performed from around Oct. 24th to the peak to assess how much gas this stock has left in it. I found that the stock's median appreciation was 54% (average 75%). The median days to peak from Oct. 24th was 66 days (average 70 days), impying a peak around Dec. 29th. The same date was derived by looking at the median days from Mar. 31st to peak.

In other words, I believe the stock is expensive, but could appreciate further. This flu season in reminiscent of the hype surrounding the 2003-04 season. Ahead of this season, QDEL appreciated 305% on Feb. 13, 2004, from Mar. 31, 2003, and appreciated 55% from Oct. 24, 2003.

BioCryst and Avian Flu: Underappreciated Call Option or Just Overhyped? (BCRX)

Good point! He did not mention that on Mad Money.