Biotech Values

[DewDiligence]

A key element of MNTA's [Lovenox] take is the gross margin. How will all of this affect that? Does more competition per se mean more expense;...is the institutional market more or less expensive to compete in?

NVS’ actual marketing expenses will increase marginally if at all on account of the AG, even if NVS becomes somewhat more aggressive in the hospital segment. However, the contractual SG&A in the NVS-MNTA Lovenox agreement that is an input in the calculation of NVS’ operating profit becomes proportionally higher if sales are lower. Thus, the key determinants of NVS’ profit margin on Lovenox will be market share and ASP; everything else is essentially round-off error.