Biotech Values

[iwfal]

I don't get this assumption. Aren't you saying S/A won't sell ANY generic?

No - I am not saying that they won't sell ANY generic. Just that I wouldn't expect AG to be priced aggressively because if they do price aggressively a tit for tat erupts. So, in total, perhaps mL keeps >43% of the market as measure by total enox revenues (WAG).

In any situation like this, where market price is nowhere close to being driven by manufacturing costs, I would suggest that price keeps going down until both parties feel that they have been treated fairly wrt market share

Isn't their goal to get a fair share (50%?) of the generic market?

I would suggest that Sandoz and Sanofi would both recognize that roughly equal revenues for each company is what is 'fair' - not Sanofi having 50% of the generic market and all of the branded.


That said, it is a fine theory - but the reality depends on the individual players. Thus real world data of past AG launches would be useful. (I one time played a 'game' with a situation similar to this - and only two sets of teams figured out this concept and thus made maximum profit. The other 3 or 4 sets of teams just went cut-throat and destroyed their profits. So it really is very individual specific.)