If you want to try and calculate the value of Advaxis do not apply a multiple to estimated earnings. Instead apply a capitalization rate to earnings. This will provide an estimate of the net present value of earnings in perpetuity. The proper capitalization rate should be an estimate of Advaxis' cost of capital which is an opportunity cost. What rate of return would investors ask for such a high risk stock? Well, its not 5%. If thats all you ant invest in VZ or T. I would suggest 10% or even 20%. A 10% cap rate produces at NPV 10 times the projected annual earnings. 20% produces 5 times.
Recall that the higher the cap rate, the lower the NPV. Also recall that a 20 yr horrizon (the duration of EU patents?)is essentially a
perpetuity for NPV calculations.
When estimating potential earnings you need not only the expected value of returns (probabiity of success x earnings) you also need to consider market penetration when estimating earnings. If your product is cheaper AND more effective than alternatives you can anticipate penetration to be only limited by the ability to supply. Additional capacity will require additional plant which can be readily financed by debt in this circumstance. The cost of debt is much lower today than the cost of capital. Under 5% I would imagine and this leverage reduces the weighted average cost of capital thus magnifying return on equity.
News 
Market Data 
Discover 
