Now to derive a per share estimate we simply divide that number by the number of shares outstanding which is 56 million and we have:

$135,260,640/56,000,000 = $2.42 per share

Then we use the Dow Jones Average multiplier to come up with a multiplier that is fair. Using the current Dow Average of approximately 13.8 we get:

13.8 x $2.42 = $33.82 Price Per Share

Of course, this estimate excludes the fact that the company will most likely raise capital by issuing more shares along the road, but then again this is just an estimate. You can factor in your own dilution by simply adjusting the amount of shares outstanding in the estimate. I will post a spread sheet that allows you to adjust these variables for those that are interested. On a final note, I would like to add that estimates and patient adoption rates are not static variables, if patients and doctors realize that a drug works really well, then the patient adoption rate can be much higher than the 10% I outlined on the first page of the article. The adoption rate is probably the single most difficult number to come up with, because nobody really knows for sure how doctors and patients will react using the drug when it is on the market. I remember a few years ago when Pfizer had an inhalable insulin for diabetics called Exubera and by all of their estimates the first year adoption rates had a large amount of patients switching to use the drug. But that didn’t happen, in fact, the drug completely bombed and the FDA started to become worried that it may contain potential harmful lung side-effects.

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