Why Pharmathene Could Go From $2 to $20

In the biotech sector I try to find stocks that have minimal downside but potential for 10x returns. Back in July, 2007, for instance, I took a lot of heat writing bullishly about DNDN on TheStreet.com. More recently, I wrote this article for the Wall St Journal on June 30 about Pharmathene (PIP) when it was at 1.56. I listed three catalysts then and suggested that the stock should minimally be catapulted in the $7-10 range. I wanted to give an update on what's gone on since then and why I think the stock could eventually be even double what I initially thought.
First off, the stock is now at $2 after a competitive company, SIGA, three days ago received a contract from the government that could be worth conceivably up to $2.8bb for its smallpox antiviral product.

This potentially $2.8bb contract for SIGA is very significant for PIP, which is engaged in a lawsuit with SIGA that could be worth billions to PIP. SIGA produces the smallpox antiviral ST-246, which was just awarded the government contract. SIGA and PIP were at one point, back in 2006, planning on merging. As part of the merger agreement, it was determined that if the merger did not go through that PIP would be able to exclusively license development and marketing rights for ST-246. The merger did not go through, BUT PIP never got the license agreement. Hence, PIP sued SIGA. In my original article I asserted that this was a catalyst for PIP to go higher but it was hard to quantify that catalyst since we didn't know what sorts of revenues ST-246 could generate. (more)

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