Assuming this trial goes well, and a future FDA trial results in approval 3 to 4 years from now, I would expect you could see significant sales approaching your figures, but that all needs to be discounted for significant risk at this point.
In the near term, however, if they do get the CE mark approval and a partner that can help them sell and distribute in Europe and other large markets that recognize the CE mark there is still a pretty nice pop from here. We will know the answer to all of those bits < 1 year.
The 18 million patient number has been criticized by Dr L as being very over inclusive. However, the number is quoted from a study conducted in 2001 (http://ccforum.com/content/8/4/222), and we do not have many other good estimates. It also worth noting that it is an estimate for the incidence of "severe" sepsis, and if that number has grown at just 2% a year over the past 10 years we would be closing in on 22 million cases worldwide annually.
As the good Dr has pointed out though, it is crazy to think that the device would be used in even a small percentage of those cases until more data is available, and even then it is just an adjunct therapy.
So let's assume less than 1%, 0.75% of the non-US market is 150,000 patients. If the pricing estimate provided by Chan is to be trusted that is $525 million in sales (not billions and billions). With a .25 profit margin, 15 P/E, and 400 million O/S, that results in around a $5 pps.
I know she will shoot holes in this noting they will have a hard time addressing the entire world market with no proof that they are capable of doing so, many of those places cannot afford the device even if they wanted it, the pricing is uncertain, the estimate for sepsis cases is overblown, etc, etc.
I tried to account for some of that with a low P/E for a growth stage company and assuming a health split of profits to partners. However, the general point is that regardless of which number you use, it is a very large market, there are very few treatment options available, and a tiny slice would yield a very nice profit from here.
She likes to constantly allude to the "billions and billions" bandied about. However, it will take nowhere close to that number to have significant appreciation in the share price.
But hey, don't trust me... trust her quote from March 9, 2010:
"This could be a nice, several hundred million dollar product and for a company like this, that should be OK. "
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