Replies to post #106845 on Biotech Values

[zipjet]

Addressing that question suggests looking at what the channel should hold.

Inventory will be in both the wholesale channel and the retailers.

I would guess that the lower bound of that is for the channel to require 2 weeks of sales in those inventories. Call that $50M. maybe two weeks is too low. But if not, then there could be $100M of inventory workdown to come - said another way, the annualized sales run rate is too high.

For my part, it is clear that sales are going to be in the 50/50 area +-10% points. Good enough for me at this point. We will know more soon enough.

mL is a blockbuster.

ij

[DewDiligence]

To what extent does the "channel stuffing" account for some of the revenue recognition?

NVS recognizes revenue when a wholesaler has assumed the risk of holding Lovenox inventory, so channel stocking is booked as current revenue.

…can we expect subsequent quarterly sales for mL to correct to the downside?

Yes; however, as noted in #msg-55775366, NVS’ current market share is higher than the market share during the early days of the Lovenox launch, which offsets the one-time distortion from inventory stocking to some degree.