The SMDC space is widely looked at as a part of the biopharmaceutical industry that could yield a grand slam pick or two due to its unique position to yield various cancer drug candidates. SMDC's show the potential to treat disease through multiple biological means, either by directly targeting the macrophages associated with the tumor or by activating the immune system directly. Outside of liquidation value, accurately valuing the company becomes more difficult but not necessarily unworkable. Comparable company analysis is nonviable due to the volatile range of multiples out there and few (if truly any) pure play comps. Discounted cash flow is generally out of the picture for companies that, at least in the interim, are not cash positive and do not have predictable cash flow patterns. However, due to the patent nature of the biopharmaceutical industry, if we can project revenues to some level of resolution, DCF can be a viable possibility to determine a general valuation range. Management expects FDA approval perhaps by 2021 (revised from 2020 earlier in the year). Until then, ECYT will be expected to lose approximately $40 million (and up to $55 million) per year from 2016 through 2020, comprised almost exclusively of R&D and G&A expense. This would put the company's EPS at anywhere from -0.95 to -1.31. Upon estimated approval in 2021, should the drugs provide $120 million in annual revenue, while maintaining ~$60 million in EBITDA, ECYT could increase its EPS to 1.39 by carrying its NOLs forward from prior income-negative years. (Depreciation has historically been low at around $600,000 per year.) I have the company's cost of equity at 14.9% (same figure for its overall cost of capital given it has no debt). Assuming capex as 3% of revenues starting in 2021 (historical averages are below $1 million per year), this would give an intrinsic price of $6.68 per share, or 74% upside off its $3.84 mark as of the market close on May 27, 2016. This would bring the company's implied terminal EBITDA multiple to around 8x: Any extra $20 million in annual revenues (a big difference for a company this small), while maintaining operating expenses at $60 million annually, would boost the projected intrinsic price up to $8.73 per share (127% upside). Revenue-based sensitivities in intervals of $20 million (based on 2021 approval) are displayed below: If, for example, approval was delayed another year to 2022, $120 million in annual revenue with the same EBITDA margin would yield a fair share price of $5.39 per share, or reduces upside to just over 40%, down from 74% in the base case scenario.