Biotech Values

[fudoo]

I don't follow your logic - it did create value for heparin producers in the aggregate.

A product which is valuation neutral to one company may be valuation accretive to another company. AND the value of any given space should increase as the production and distribution are either rationalized or aggregated to fewer parties in the space. Think less competition, more pricing power even if all other factors remain constant. Think fewer competitors, less sales and marketing expense. Think an increased number of Heparin experts on the street in Illinois, less wage inflation pressure.

Many divestitures are predicated on this premise, ie valuation acrretive to both companies, ie more efficient use of capital on behalf of both companies.

The exiting of Baxter from the heparin space decreased the number of potential buyers of feedstock ingredients (diminished power to the sellers of feedstocks) and decreased the number of heparin suppliers (increased pricing power of the remaining finished heparin companies). Thus, the heparin space became more valuable when a major player like Baxter exited - pretty simple economics that are at work in numerous companies discussed on this board.