Replies to post #101444 on Biotech Values

[dewophile]

i'll bet they were also sitting on quite a bit of expired product given approval came about a year later than expected
in fact the broad range of development costs cited in the court papers (50-70m) may have something to do with figuring out the write down of expired inventory that was expensed as R&D

[zipjet]

MNTA - two subjects

I’m pretty sure the volume constraint Sandoz had at the time of the Lovenox launch was in its supply chain, not its own facilities.

That is good news. Porcine life cycle (6 mos) and the fact that SNY will no longer need as much feed stock each suggest that the supply chain can be adjusted more quickly than I think Sandoz can ramp. So my guess is the supply chain could ramp in 6 months. I did not model 50% unit sales until some time in 2012. So this all suggests the supply constraint of 35-40% of units will never constrain. :-)

iwfal

But even if volumes match, I'd bet that MNTA's manufacturing costs are substantially higher than the name brand.

As DD did, I take issue with "substantially higher", especially when those words are associated with multiples of cost.

Sandoz - The output product is the "same". The inputs must be similar. The process is likely similar though it embeds automated quality controls presumptively state of the art. Those quality controls likely have low or insignificant variable cost yet deliver significant value. The value is the greatly reduced chance of contamination.

Bottom line for me is that CGS is likely close enough to SNY that it is a non-issue even in a more competitive environment such as a TEVA approval and an AG launch.

ij