Having spent the better part of two decades investing in biotechs, I know better than to take any "it seems too good to be true" story at face value. And yet, when I dig into YM Biosciences (YMI) I'm legitimately puzzled at the skepticism, lack of support, and low valuation of this biotech. While one-drug stories are indeed risky and YMI has a formidable competitor to deal with, the current valuation on this stock seems more like a worst-case scenario in a biotech market that generally leans toward being much too optimistic.
CYT387 And Anemia - The Axis Around Which The Story Revolves
Right now it seems like all of the bear-vs-bull debate essentially boils down to whether or not YMI's lead compound CYT387 can demonstrate the ability to reverse/reduce anemia in myelofibrosis patients. If it can, the drug is underestimated and the stock is too cheap; if it cannot, fair value may not be all that much higher (but more on that later).
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YM BiOSciences' Cheap Valuation Doesn't Make Sense
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