S-curve explosion

Genentech Inc.'s booming valuation can be attributed to the prospect that new indications soon will be layered on to Rituxan, Herceptin and Avastin, which could nearly triple the company's potential U.S. market for the drugs, which totaled $2.6 billion in sales last year.

Calibrating this expanded opportunity requires totting up different potential growth curves, extrapolating patient populations and making presumptions about treatment regimens. In DNA's case, despite the maturity of the company's Rituxan and Herceptin franchises, the total untapped U.S. market size looks to be more than $7.5 billion, which helps explain why the stock has been so hot...