Momenta Pharmaceuticals, Inc. (MNTA)

[iwfal]

The GM on a drug had nothing to do with how MNTA is compensated.

Ok - reasonable question: what is our current estimate of GM for NVS Lovenox.

Method 1 - the technique you used (using the 45% profit share for the first 30% of the quarter and then 9% royalty for remainder of quarter). 22-176*0.70*0.09=GM*0.45*176*0.30 ==> GM=45% for the first month of quarter


Method 2 - assume that the reduction in total market $ volume between Q3 and Q1 is the reduction in price. If you assume 67% GM in Q3 for the entire market then you can calculate the GM for the market now. Total market in Q3 ( #msg-68710933 ) was ~$440M. Total market in Q1 ( #msg-74928636 ) was $378M. Implies a GM of 61%. Obviously the erosion in branded GM is less implying that the erosion in generic GM is greater - perhaps 55% or so for the entire quarter (and obviously the GM in the first month would have been meaningfully higher because aL hadn't yet scared NVS and SNY into lowering their prices).

These numbers are far enough apart that I suspect there is something we are ignorant of - e.g. does Lovenox revenue not accrue continuously so that less than 30% of the Sandoz revenues were counted towards profit share in the last quarter?

Obviously I was at least a little optimistic with even my lowest assumed GM for a three way split. But there is enough noise on this calc that IMO it isn't yet possible to say much more than that.