Replies to post #69205 on Biotech Values

[DewDiligence]

I would submit that the Lovenox case is sui generis for two reasons:

• There’s a substantial probability that the first approved generic Lovenox will be the only approved generic.

• If there is only one approved generic, sales of branded Lovenox after the generic launch will almost certainly be the largest in history for the branded version of a genericized drug.

Thus, SNY has a lot to lose from an immediate launch of an AG in the case where there is only one approved generic.

My view is intermediate between yours and zipjet’s. I think a Lovenox AG timed to coincide with the first generic launch is considerably less likely than an AG with a typical generic launch, but this outcome is nonetheless a legitimate concern for MNTA investors.

[zipjet]

>> 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?

Without knowing what happened in each of those cases, I suspect that the branding company expected many generics to hit the market. IF that is the expectation then gaining share with the authorized generic (ag) during the exclusivity period translates to sustainable market share of the generic. The lost profits by offering the ag become the cost of establishing market share for the ag.

>>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?

No*. Can you give an example of an ag being offered where it was expected that ONLY one generic would be approved for a significant term?

>>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.

As I outlined them, including a SINGLE generic with no others for a significant term, I would predict no ag's. But that is rarely the case. Most blockbusters face a flood of generics. If that is what the branded company expects, it might as well offer an ag and grab all the share it can during the exclusivity period even at lost profits. Those lost profits benefit the branded company in two ways, establishing the ag and denying profits to the generic who breached the patent. IMO, the branded companies have been far too slow to degrade the profitability of the generic model and that has only increased the patent attacks.


ij

* Just guessing - but I bet there are examples in the early generic period, though I cannot cite them

[rkrw]

I can't name any products, but I think Merck was a company that didn't bother with AG's. For better or for worse. I'm sure there are plenty of other examples.

With respect to mnta, I think people need to worry about the cart before the horse. Approval rests with the fda and no one can say with any certainty what will happen. But if approved, even if sanofi launches a generic, one big offset is you'd think it lowers the perceived approval risk for something like Copaxone.