Biotech Values

[linhdtu]

raj, the first thing I'd do is to assume the actors are rational.

mnta/sandoz now have 59% of the mkt in term of $. as long as the split is 50/50 , it is a tacit duopoly.

however competitive pricing eventually drives mL to shift the balance to the generic version.

the key to your question which is "will the event of the AG hurt momenta/sandoz profit" is yes if sny is not rational and triggers a discount price war which kills profit for all parties involved.

my take of this situation is that sny is not irrational. you know it is illegal for the two parties ie sandoz/sny to agree to split the us Lovenox sales in half. and given the fact there is a price disparity between the branded and mL, in a free mkt system, eventually the balance will shift towards the cheaper version ie mL, hence the latest mkt share of 59% which if you care to notice has been slowly but surely creeping up on the side of mL. thus sny has to try to get back their 50% share and the AG launch is their answer to the erosion of their mkt share.

I don't know how long it will take to sort out but rationally ( i assume aL will never see the light of day or be delayed for at least 2-3 yrs) the mkt will stabilize at 50/50 give or take 5%.

what the total value of the US Lovenox depends on the pricing. if there is no serious discount , sny will try take back some mkt share of the retail from sandoz and sandoz will try to grab some hospital share from sny and the new equilibrium when reached won't be much different form what it is today. that is my opinion.