There are currently 10,220,000 shares issued and outsatnding of SPYN. At a share price of 34 (10,220,000 x 34) the total market capitilization is $347,480,000. At December 31, 1997, SPYN's annual report stated that there were 2,000,000 warrants outstanding at an average price of $8.00. If you add the 2,000,000 warrants to the stock you get a fully diluted market cap of $415,480,000. In the news release issued by the company on October 16,1997, they stated that the world wide estimate is 400,000 spinal fusion surgical proceedures performed each yeay. If this company's product is indicated in 25% of these proceedured then the market for SPYN's product is 100,000 BAK implants per year. This indicates a total market of around $300,000,000 per year, if they get 100% of the market for the products indication. At a market cap of $347,480,000 to $415,480,000 this is $47 million to $247 million greater than the entire market.
In the above mentioned press release of October 16, 1997 the company states "Third quarter net sales increased 12.7% over sales of $14.2 million in the second quarter of 1997. Net income for the third quarter of 1997 increased 12.9% over net income of $2.9 million for the second quarter of 1997." As stated by the company, the sequential growth is decellerating rapidly and looks more like 12.9%. This 12.9% growth rate going forward cannot support a price earnings ratio of 38x. This growth rate is more likely to see a PE of 15. |
