300,000 new cases of breast cancer and melanoma in the U.S. each year and more than 1 million worldwide. In the US alone, with the existing and new cases of breast cancer and melanoma, there is market potential for 200K - 300K studies per year. At $120/study that is $24M - $36M/year. With European approval, that could easily double.
And, in addition, Navidea is conducting an interim analysis on Phase III head and neck cancer study and have begun a physician-initiated study in colorectal cancer. Usage of Lymphoseek in these cancers is almost a foregone conclusion and could easily double the number above. NAVB could be seeing a Market Cap/EBITDA ratio of 8 within a year, similar to what Cardinal Health, Inc. is currently sporting.
That is, it could grow into its Market Cap very quickly. Of course it can't be treated according to its current sales and/or earnings. It is foolish to suddenly treat NAVB by the same valuation rules that are used to value mature companies. They just got their first FDA approval. One buys this company for the now-proven management, and the growth and the pipeline. They've proven they can do it and I don't think it will take long for the market to give them the vote of confidence they deserve.
So, the long thesis is one of (a) solid, proven management team that can make their pipeline a reality; (b) a new approved diagnostic that will be accretive to earnings; (c) upcoming EU approval; (d) increased usage in other cancer types; (e) the pipeline. All of these should, if my calculations are correct, make NAVB worth about $5/share, and it should be trading at that level in the not-too-distant-future.
And, can someone refresh my memory: What was the short thesis again? Hmmm? What's that??? Oh yeah, there is none. That's right. Thanks.