ThomasS, zipjet, JR, and I have assigned probabilities to the four mutually-exclusive cases described below to arrive at the fair value figures shown in the following table. The market caps and share prices corresponding to each case pertain to the time interval 9-12 months from today (i.e. Feb-Apr 2009).
All posters are welcome to submit their own probabilities or alternative analyses.
*JR assigns prices of $35, $20, $10, $4 to the four cases in lieu of the prices specified below.
Description of four cases:
The following background assumptions apply: MNTA continues to make steady, but not spectacular, progress on M118 and other non-Lovenox programs; the US passes legislation enabling follow-on biologics during 2008 or 2009; MNTA does not sell shares before the status of the Lovenox ANDA is cemented; Sanofi fails to reinstate its US Lovenox patent; MNTA does not receive a buyout offer.
Case 1: MNTA/Sandoz obtains approval for generic Lovenox and neither Teva nor Amphastar obtain approval within the next 9-12 months. (Sanofi may decide to launch an authorized generic, but it would be the only generic in the market other than the one from MNTA/Sandoz.) Market cap: $2.1B; share price: $57.
Case 2: MNTA/Sandoz obtains approval for generic Lovenox and Teva or Amphastar do also. Market cap: $900M; share price: $24.
Case 3: Nobody obtains approval for generic Lovenox within the next 9-12 months, but the ANDA from MNTA/Sandoz remains under consideration by the FDA pending resolution of certain issues. Market cap: $400M; share price: $11.
Case 4: FDA rejects MNTA/Sandoz’s Lovenox ANDA with no possibility of a resubmission. Market cap: $200M; share price: $5.50.
“The efficient-market hypothesis may be the foremost piece of B.S. ever promulgated in any area of human knowledge!”
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