Considering the recent news I am revising my valuation estimates. I raise the chances of a sole generic for MNTA and raise the probability of multiple generics, eliminating the likehood of no generics being approved. The old percentages are listed first and then the revised estimates. Same for the resulting valuation which is now $38.65, IMHO.
>>I see four cases according to the status of the Lovenox ANDA:
>> Case 1 – MNTA/Sandoz obtains approval for generic Lovenox and neither Teva nor Amphastar obtain approval: $57 ($2.1B MC). I would have an even higher valuation for this case were it not for the possibility of SNY’s launching a Lovenox “authorized” generic.
20% 50%
I do not think that it would be economically advantageous for SNY to launch an "authorized" generic provided they did not expect FDA to quickly approve other generic L's. Doing it would be an extreme scorched-earth approach which is not typical of pharma.
>> Case 2 – MNTA/Sandoz obtains approval for generic Lovenox and Teva or Amphastar do also: $24 ($900M MC).
20% 40%
>> Case 3 – Nobody obtains approval for generic Lovenox but the application from MNTA/Sandoz remains under consideration by the FDA pending resolution of certain issues: $11 ($400M MC). This case is essentially the status quo with some “regression to the mean” vis-à-vis the unduly negative sentiment toward the stock that is currently suppressing the valuation, IMO.
50% 0%
>> Case 4 – MNTA/Sandoz receives an FDA rejection of the Lovenox ANDA with no likelihood of a resubmission: $5.50 ($200M MC).
10% 10%
$22.25 $38.65
Thanks for the work, DD. Very interesting and thought provoking.
ij
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