Biotech Values

[zipjet]

If we take notice of Eyeambills post regarding HeathTrusts Lovenox's agreement and RegularDoc's post regarding Sanofi's pricing for VHA contracts (priced lower than Sandoz).

Now add to those comments Sandoz's court filing estimating a sales projection of >$40 mill over the next 6 weeks.

Those are good data points. But you carefully elided several others that help complete the puzzle. Sandoz, at launch, could only supply 35%-40% of the market. Sandoz shipped 5m units before the "next six weeks". Shea indicated in the BAC presentation that they had fully penetrated the market, which I took to mean they were selling out their entire production.

I might start to think that they don't teach the Duopoly theory in France's higher education system.

SNY needs to cut deals to maintain market share. I would expect them to meet Sandoz pricing for similar volume contracts. This type of tactical contracting is consistent with my views on duopoly pricing.

IF a price war starts neither competitor will maximize duopoly profits. It is silly for SNY to start a price war with a capacity constrained competitor. It is silly for Sandoz to try and take 90% of the unit market.

Will rational* behavior prevail?

My guess is yes.

zip

* Keep in mind that there could be other factors which I am missing that would make a "scorched earth" pricing strategy by SNY rational. Eg. If Sandoz or MNTA had another pipeline product that was aimed at SNY.