Downrampers Fail, page-11

The approach I take in assessing the probability of approval is based on the number of questions answered to date. What the CEO said at the AGM 2014 was that questions that were going to be raised following approval were reclassified as 180 day questions that included questions relevant to data from the 120 day questions. What you can take from this is that when the company announced that most of the 120 day questions have been answered, all of the 120 day questions would have been answered and resolved if it weren’t for the post approval questions being brought forward.

If you take this as gospel (coming from the CEO I believe you can) then 100% of the initial 120 day questions are answered.

This is now where assumptions come into play, if we assume that ~30% (based on the expected time taken to answer questions at 120 day and 180 day stage per EMA guidelines that is 6 months and 2 months respectively) of the number of questions asked at the 120 day stage are being asked at the 180 day stage you can deduce a probability of approval.

130% Total Questions
30% Unanswered
Pr(approval)= 1 – 30/130 =~ 75%

This correlates well with the CEO inferring approval is very likely


This leaves 25% for distribution between a delay and no approval which could be assumed to be 15% and 10% respectively.

Expected values for assumed share price are as follows:
Approval ~ 0.55
Delay ~ 0.15
No approval ~ 0.01

Based on the above assumptions and best estimates, the following can be deduced:

Pr(approval) = 0.55 x 0.75 + 0.15 x 0.15 + 0.01 x 0.10 = 0.43

This is a simplistic break down of the expected value of the share price factoring in risks, of course as risks not considered gradually become less, that is, submission of questions and time for unexpected events to occur is reduced then I believe the share price will start to approach this predicted figure of 0.43 leading up to the 210 day mark as it did at the 180 day mark.



These predictions are based on assumptions and best estimates and in no way should be constructed or relied upon as financial advice.