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I agree that there may be other drug companies with better potential.
From the company's website it looks like Cinryze and Vancocin are their two main products. The patent has expired on Vancocin, and generic competition for this product is probably eminent.
Going from the Financial Results posted on moneycentral.msn.com) Growth rates for the past five years look phenomenal at 105.68 for the company vs. 35.40 for the industry, but the past year does not look so hot with sales this quarter trailing the industry (29.4 for ViroPharma vs 80.6 for the industry) and net income also down (ytd at -8.5 vs +21.9 for the industry.)
I'm not sure how to value this one. Particularly with the near term risk that they will lose money, and no clear picture of their long-term prospects. Consensus EPS trends estimate this one dropping through 2010.
With a simple valuation based off of the current EPS of 1.1, an eps growth rate of 10% which seems optimistic compared to analysts eps trends, and using a fyi P/E estimate of 10.5 (moneycentral again) I am getting something a fair bit lower than their current share price.
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