Intellipharmaceutics International Inc. (IPCI)

[numbersarefun]

AngeloFoca, low price per pill shows high competition. Generic Effexor XR is under $1 per pill, while the name brand Effexor XR is around $10 per pill. That is over a 90% discount to the name brand. Now take a look at Focalin XR. Generic Focalin XR is around $6 per pill, while the name brand Focalin XR is around $12 per pill. That is about a 50% discount to the name brand.

In the latest quarter, IPCI only made $0.6 million on the two doses of Focalin. Annualized that would be $2.4 million. Pricing pressure has steadily reduced IPCI's Focalin revenue. Generic is currently around 50% discount to brand name. What would IPCI's revenue be if Focalin were selling at a 90% discount like Effexor?

Do you think that IPCI's partner... being 1 of 11 wholesalers can capture 5% market share??? a lamb's share of the pie???

It depends on the partner. Par does not have generic Effexor XR. But even if 5% or $33.5 million in revenue is captured, the profit margin must be pretty low if the drug is priced at under $1 per pill.

Tylenol sells for 8 cents a pill, but it brings in $1.8 Billion a year for J&J.

But generic competition does not sell it for much less. Walgreens brand or CVS brand maybe sells for 5 to 7 cents a pill. Profit margin must be pretty low for the both J&J and generic manufacturers. Also, you are comparing an over-the-counter drug to the pricing of a prescription drug. Most blockbuster drugs are expensive.

but I believe Focalin split with Par is probably 30% to 40%

Focalin market for the 2 doses was around $205 million. With 50% generic discount, the market drops to around $102 million. Assuming generics took 90% of market share, the generic market is around $91 million for the 2 doses. IPCI said they have about 33% market share. So Par Pharma maybe does $30 million revenue a year on the 2 doses. I have no idea what profit margin Par Pharma makes. I would guess maybe 50%-80% profit margin since it is $6 per pill and probably cost 20 cents to make.