Replies to post #128497 on Biotech Values

[DewDiligence]

I didn’t offer such a number, but it would not be unduly hard to calculate. You need to specify a discount rate to apply to future cash flows and to make some assumptions about other competitors. I presume that if MNTA settled with Amphastar, MNTA could settle with any other generic entrant on the same or better terms. I think it’s also safe to assume that SNY will not launch an authorized generic while MNTA’s generic is the only one in the market.

[exwannabe]

In other words, how much will Ampha's stealing MNTA's IP cost MNTA?

That is a VERY difficult calculation, but here is my best try to airball some numbers.

Let us say that a rational discount model is 20%/y. Then the non-infringing present value would be 5*N (here N is the present run rate).

DD is starting with 2 year hold off, this will yield N*1.8.

The remainder is hard to guess, but if I had to I would put 1*N up.

So DD is settling for 2.8 on 5.

Let us be real, if it goes to court anything can happen. Greed is good, but walking out the door a winner is better.