Biotech Values

[iwfal]

Wrong interpretation, IMO. It’s not that the companies expect the market share for interchangeable FoB’s to be lower than I think it will be, but rather that there’s a non-trivial risk that interchangeable FoB’s will not pass muster with regulators. Since BAX is bearing a sizable portion of this risk, BAX is entitled to be compensated for this risk in the way the deal is structured.

Suggest:

1) I might accept this as an explanation for the 9 pct - but it isn't the part of the deal I find low - because it isn't the part of the deal that focuses on MNTA's special sauce and I wouldn't expect much recompense in such a competitive space.

2) the 18 pct part is the part that appears telling. Under your supposed position (40 pct market share) I'd expect price erosion of no more than 50 pct. And thus a GM of 70 pct or so. Thus BAX gets about 2.5x the share of Gross Profit as MNTA when the thing that MNTA brought to the table has borne fruit. I think this is strong data that they expect much more competition than you do.