Several posters 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 approximately 9-12 months from today (Feb-Apr 2009), by which time MNTA/Sandoz expects the FDA to have formally responded to the companies’ ANDA resubmission. Thus, the four cases below are defined in terms of the FDA action on the next review cycle.
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.
**rkrw assigns prices of $40, $10, $15, $8 to the four cases in lieu of the prices specified below
Description of the 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, (Sanofi may 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; Teva, Amphastar, or both obtain approval too. Market cap: $900M; share price: $24.
Case 3: The FDA formally responds to the MNTA/Sandoz ANDA resubmission with new questions or requests. 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.
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