From today's announcement.
$100,000 USD Signing fee
• $350,000 USD Completion of clinical studies and receipt of CE mark for first product
• $750,000 USD First product to gain FDA approval
• Royalties from Breast Sling and Breast pocket
4% for the first 3 years then 3% ongoing
• Royalties for a biodegradable breast prosthesis
6% for first 3 years then 4% ongoing
Have a good look at what the Breast sling and and Breast Prosthesis market is worth first of all?
Yes that's right US$2 BILLION per annum, it would not surprise me that if this new area works out well for both PNV and EL going forward, I think women would want something that dissolves in time and just leaves their own tissue in place in the end rather than having a plastic filled bag of Silicon in there forever, something that is both aesthetically pleasing and feels the same as a normal breasts would over time would have to be a winner you would think surely?
I do believe Establishment Labs will capture a very big slice of that market going, lets hypothesise here, maybe 50% or more of that market going forward? possibly?
Now lets look at what around 4% of that market could be worth once they reach traction?
50% of a US$2 Billion PA market would be US$ 1 Billion, now lets look at 4% of that, It is
US$ 40,000,000 each year and possibly a good deal more, now lets apply a PE ratio of 25 to this, which is not over the top, some PE's are closer to around 30 from what I read?
That equates to
US$1,000,000,000.
See here-:
https://www.gurufocus.com/sector_shiller_pe.php
|
Sector |
Number of Stocks |
Shiller P/E |
Regular P/E |
| 1 |
Energy |
31 |
18.70 |
30.70 |
| 2 |
Consumer Defensive |
38 |
21.80 |
20.60 |
| 3 |
Communication Services |
8 |
22.10 |
8.00 |
| 4 |
Utilities |
28 |
24.30 |
22.00 |
| 5 |
Financial Services |
74 |
26.40 |
18.10 |
| 6 |
Industrials |
72 |
26.90 |
23.10 |
| 7 |
Healthcare |
61 |
28.90 |
29.10 |
| 8 |
Consumer Cyclical |
81 |
30.50 |
28.30 |
| 9 |
Basic Materials |
21 |
32.40 |
23.80 |
| 10 |
Technology |
63 |
36.10 |
32.40 |
| 11 |
Real Estate |
29 |
46.80 |
29.90 |
| 12 |
S&P 500 |
500 |
31.6 |
24.7 |
I know these sorts of figures will take time to be achieved, but given time I believe they can?
And this figure is only for that one platform, go figure what the rest will do for us!
(20min delay)