With Shkreli Spike, KaloBios Pharma (KBIO) May Be Overvalued by a Factor of 4

November 18, 2015 4:57 PM EST

The upside being seen in KaloBios Pharma (NASDAQ: KBIO) after the close (400%+) after Martin Shkreli bought heavily may be waaaaay ahead of itself.

Based on back of the envelope the wind-down value may be around $2.60/share. Meanwhile, the stock is at $11 after-hours.

Here's the quick math:

At June 30, 2015, KaloBios had cash, cash equivalents and investments totaling $23.2 million.

Second quarter cash burn was $6 million. The company didn't report third quarter, but assuming the same burn that gets you to $17.2 million.

With the wind-down announcement the company said it repaid in full its outstanding secured loan obligation to MidCap Financial, secured lender to the company, in the approximate amount of $6.6 million. That gets you to $10.6 million.

There are 4.1 million shares outstanding, so that gets you to ~$2.60 per share.

The company may have burnt less in Q3, but even if they didn't burn a penny that is only ~$4 per share.

The stock after-hours is nearly $11 per share.

Note, in the filing, the most Shkreli paid was $2.43/share but only 7K shares. He paid as little as $0.61.

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