Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

Equity Bottom-Up

<p>OBI Pharmaceuticals (4174:TT) is a biotechnology company developing treatments for cancer. The shares have declined by 44% since our last Insight in July <a href="https://www.smartkarma.com/insights/fasten-your-belts-air-pockets-ahead" target="_blank" data-smartkarma-citation="insights:4670">Fasten Your Belts: Air Pockets Ahead</a>. The company has been mired in controversy for the most of 2016 with the failure of its lead compound in a late-stage clinical trial and accusations of insider trading. The current valuation of US$1.4 billion (7x+ cash) values the company's technology at US$1.2 billion: still one of the highest among "pre-revenue" Taiwanese biopharma companies.</p><p>Expectations have come down, but the shares remain vulnerable as many similar companies have traded for 5x cash (33% lower from here). The commercial prospects for OBI’s product candidates will remain murky for some time because the earliest data readouts won't be until late 2017. The ongoing insider trading inquiry could ensnare the company's Chairman, which would be a signifcant blow to the company.</p>

OBI Pharmaceuticals (4174:TT) is a biotechnology company developing treatments for cancer. The shares have declined by 44% since our last Insight in July Fasten Your Belts: Air Pockets Ahead. The company has been mired in controversy for the most of 2016 with the failure of its lead compound in a late-stage clinical trial and accusations of insider trading. The current valuation of US$1.4 billion (7x+ cash) values the company's technology at US$1.2 billion: still one of the highest among "pre-revenue" Taiwanese biopharma companies.Expectations have come down, but the shares remain vulnerable as many similar companies have traded for 5x cash (33% lower from here). The commercial prospects for OBI’s product candidates will remain murky for some time because the earliest data readouts won't be until late 2017. The ongoing insider trading inquiry could ensnare the company's Chairman, which would be a signifcant blow to the company.

OBI Pharma Inc

The "Fasten Seat Belt Sign" Remains On