Biotech Values

[DewDiligence]

Re: More settlement musings

…is it likely that MNTA is going to come out of such a settlement worse off (not getting as much money over time) than it would have been in the absence of Amphastar's approval?

Yes, of course—MNTA has to forgo some upside to eliminate the risk of losing the patent case. However, the kinds of settlement terms outlined in #msg-67801477 would not forfeit as much cumulative economic value as exwannabe suggested in #msg-68017105 because of the horizon issue mentioned in #msg-68017552.

Moreover, one could argue that MNTA’s shareholders will be better off after the kind of settlement envisioned in #msg-67801477 than they would have been if Amphastar had never received FDA approval. How can this be? Because a favorable settlement with Amphastar will ensure that no one will be unduly concerned about FDA approval of generic Lovenox from Teva or any other applicant; instead, investors will assume that MNTA will be able to settle with those companies on the same (or better) terms as the settlement with Amphastar. In other words, following a favorable settlement with Amphastar, the headwind on MNTA’s share price from worry that a new competitor will destroy MNTA’s lucrative Lovenox franchise will finally be gone.