TS03 Inc Trust Units TSTIF

US GI Market Size

[Drrwong]

Just wanted to share some  math behind this US GI market alone, as I was surprised how big it was when I first did the math, and it clearly justifies RR spending some money (i.e.: hiring) on it.

Assumptions:  I would say these are very realistic, if not conservative
-  550k ERCPs procedures per year in US
-  2 ERCPs per load
-  6 loads per day for each VP4
-  300 working days a year (or 82% correction factor by 300/365)
-  85% efficiency ratio:  because ERCP procedures are not perfectly distributed among the different facilities so that everything run at maximum load/case per day, so there will be VP4s running at less than maximum capacity due to the number of available cases, which means we need more VP4s

Math:
-  Consumables:  550k ERCP procedures per year x $20 per load / 2 ERCPs per load / 0.85 efficiency ratio = $6.5mm revenue per year or $5.2mm of profits at 80% margins
-  Capital equipment:  550k procedures / 6 loads per day / 2 ERCPs per load / / 0.82 working days factor / 0.85 efficiency ratio x $135k per machine = $8.9 billion revenue, or $2.7b of profits at 30% margin
-  Obviously the capital equipment side needs to be discounted over several years as the sterilization requirements will be phased on gradually,  but the magnitude of these numbers are quite staggering

Just remember these are just US ERCPs market only, and it does not include anything for colonoscopes (I can't see how hospitals sterilize duodenoscopes but not colonoscopes) or ex-US geographies (the entire EU market is typically the same size as the US).
Also this has nothing to do with the general hospital sterilization market (i.e.: central SPDs) either, which I think will gain traction once hospital gains confidence with the performance and servicing of VP4s.

All this relative to TSO3's $175mm USD enterprise value currently!!!