Biotech Values

[DewDiligence]

Another disclosure on MNTA’s 2Q11 CC today is that the contractual royalty rate payable by NVS in the event of a second FDA-approved generic Lovenox in the US market is “low double digits.” According to MNTA, the new royalty rate is an increase of 20-25% from the old royalty rate, which was never precisely revealed but was thought to be about 10%.

The above provision never comes into play if NVS/MNTA continue to have the sole FDA-approved generic on the US market. In this case, MNTA continues to enjoy a 45% share of NVS’ Lovenox operating profit, which works out to about 31% of NVS’ in-market Lovenox sales.