Biotech Values

[DewDiligence]

Adjusting 3Q10 Lovenox sales for channel stocking:

Ordinarily, I would consider two weeks of channel inventory to be normal for a drug such as Lovenox. However, on NVS’ CC today, Joe Jimenez said that NVS had opted to build a relatively high level of stocking “for competitive reasons.” Therefore, I would guess that the channel currently has about four weeks of inventory.

Adding 28 days of assumed stocking to the 69 days of the 3Q10 launch period gives 97 days, which yields an effective annualized run rate of $292M(365/97) = $1.1B. This number is consistent with NVS’ having a 45% market share of the (now) $2.4B US Lovenox market.