Biotech Values

[zipjet]

I'm beginning to think that the sales are Sanofi's to lose. In other words, it looks like the hospital groups would prefer to stay with the original Lovenox as long as the 'price is right'.

That is logical.

IF the choice is use a product (L) that I have used before and know or another product (mL) and the price is the SAME - I would stay with my old standard.

But the interplay gets more complicated.

The incumbent will have to match price on part of the market or see their share* drop well below 50% share. If the incumbent matches price on too much of the market, the innovator will cut again, etc, etc. That is a no-win game. This is why some equilibrium point must and will be achieved. It is why leaving a production constraint in place could help signal where that equilibrium will be reached.

If would be very interesting to me to read the contracts that are being signed. I doubt very much that the buyers are really locked up so that they cannot switch.

zip


* L likely would keep some sales even at premium pricing. 5%? 10%? 20%? I do not know how much but that range seems a fair guess.