Nile Therapeutics, Inc. (NLTX) is developing CD-NP, a chimeric natriuretic peptide currently in phase II clinical studies for the treatment of acute decompensated heart failure (ADHF). Prior phase I and phase II data so far has been highly encouraging. With a market capitalization of only $14 million, Nile Therapeutics shares are bafflingly under-valued.
We believe with positive data from the ongoing phase II program in hand the company is worth at least $80 to 100 million. Taking the mid-range at $90 million, and then backing out the $20 million most likely required to fund the phase IIb program, we arrive at a value of $70 million for Nile Therapeutics. This equates to a price of $2.00 per share.