Replies to post #69190 on Biotech Values

[Biopharm investor]

zipjet

"I suspect that the drug companies have some rather sophisticated models to help them make these kind of decisions since they would not be hard to build."

I am sure you're right about this. But what, if anything, does it tell you that in the case of every blockbuster drug that has faced generic competition from a patent challenge in the past few years, the innovator has always entered into an authorized generic agreement as soon as the first generic entered the market? Can you cite one or two examples of a blockbuster drug that faced generic competition from a patent challenge in which the innovator did NOT execute an authorized generic agreement, thereby allowing the generic company to be exclusive in the market for its 180 days?

If the economics were as you outlined them to be, you wouldn't see AG's enter the market until the exclusivity period elapsed and the market opened up. That is definitely not the case, which I think demonstrates there is some flaws in your logic.

[jb_118]

re: game theory

Your analysis seems good enough for a single game scenario.

I'm not aware of any other SNY compounds that MNTA might target, but if SNY does buy Genzyme, you may have the possibility of a repeated game scenario if SNY is worried that MNTA might target enzymes (as an analyst suggested on the CC, although I don't know how much weight to put into that).

In that case, SNY has additional incentive towards more of a scorched earth policy that would both deny MNTA resources and perceived upside to target an SNY compound in the future.