There was a Snickers commercial a few years back where there's an old guy painting the end zone for the Kansas City Chiefs, and when he sees that he put down "Chefs," he mutters, "Great googly moogly." What a great line, and it pretty much sums up ImClone Systems' (NASDAQ:IMCL) price moves over the past two days, with the stock up about 12% since yesterday's open. With the company's absurd market cap of $5.2 billion, I really have to wonder who is buying this stock and just what the heck they are thinking.

ImClone's Erbitux is approved as third-line therapy in patients with metastatic colorectal cancer that expresses the epidermal growth factor receptor. Taking into account this population size and assuming 30% market penetration and a drug cost of $10,000 per month, I arrive at a peak U.S. sales figure near $600 million. With a 39% royalty on those sales due to ImClone from partner Bristol-Myers Squibb (NYSE:BMY), ImClone's revenues would be near $225 million. Adding in a royalty on European sales from partner Merck (NYSE:MRK), my ballpark figures for peak ImClone revenues from worldwide sales of Erbitux are $275 million to $325 million.

I recently wrote an article about MedImmune (NASDAQ:MEDI), a biotech company with a billion dollars in revenue today that only has a $6 billion market cap. So I fail to see how ImClone, which may or may not have $300 million revenue in the future, is worth $5 billion today. No way, no how. Another way to look at it is that price-to-sales ratios for profitable biotech companies tend to be around a multiple of 10. With that rule of thumb, ImClone, at peak Erbitux sales, would be about a $3 billion company.

In my opinion, an investment in ImClone right now requires a lot of finger-crossing: Hope that sales materialize in the present indication, hope that the label will be expanded to first-line therapy in colorectal cancer, hope that other indications will be approved, or even hope that "greater fool" investing will work out and that there will always be others willing to pay a higher price.

Charly is the guest analyst in the current issue of Motley Fool Hidden Gems . To discover which company tickled Charly's fancy, take a free 30-day trial.

Fool contributor Charly Travers does not own shares of any of the companies mentioned in this article.