Replies to post #129563 on Biotech Values

[iwfal]

I don't get this assumption. Aren't you saying S/A won't sell ANY generic?

No - I am not saying that they won't sell ANY generic. Just that I wouldn't expect AG to be priced aggressively because if they do price aggressively a tit for tat erupts. So, in total, perhaps mL keeps >43% of the market as measure by total enox revenues (WAG).

In any situation like this, where market price is nowhere close to being driven by manufacturing costs, I would suggest that price keeps going down until both parties feel that they have been treated fairly wrt market share

Isn't their goal to get a fair share (50%?) of the generic market?

I would suggest that Sandoz and Sanofi would both recognize that roughly equal revenues for each company is what is 'fair' - not Sanofi having 50% of the generic market and all of the branded.


That said, it is a fine theory - but the reality depends on the individual players. Thus real world data of past AG launches would be useful. (I one time played a 'game' with a situation similar to this - and only two sets of teams figured out this concept and thus made maximum profit. The other 3 or 4 sets of teams just went cut-throat and destroyed their profits. So it really is very individual specific.)

[zipjet]

MNTA - catching up this morning.

I have now read the transcript of Fridays argument.

I thought both attorneys did a good job. Frank (MNTA attny) was better. Weir (SNY) made much of an argument that was weak - specifically that peak nine was not described as "1,6 anhydro" anywhere in the patent. Lawyers are trained to look behind a name. The rest of us know "that which we call a rose, By any other name would smell as sweet".

The judge's time to trial question: I find NO inference in the answers to this question on which side will prevail. This is a question that every judge facing a case with on-going damage, extraordinary relief claims and balancing his docket will at some point ask. The key to the time required will depend greatly on discovery time lines. While I agree with DD's comments that the time line relates to damages/bonding - it offers no useful info on who will prevail.

Profit maximization (PM) and the AG launch assuming no aL (PI issues): SNY maintaining control of the AG is important since at this point there are decisions that are critical to PM. That would not be the case in a situation where there were many generics all competing for market share on price. Given that for practical purposes there are two distinct market to sell into, pharmacy and institution, and MNTA has largely penetrated ONLY the pharmacy channel - we should expect the AG to target pharmacy. IF they can split that with MNTA it forces MNTA to shift marketing to the hospital channel. We have no sense of how successful MNTA will be in tapping the hospital market. Thus, rocky's 75% share to SNY (both branded and AG) sets the ideal for SNY and likely the top bound. IF I were running this for SNY I would tap the pharmacy market more lightly if I thought no aL would launch and try to take say 1/3 of that market giving me about 2/3's of the whole.

I still think the AG will be dissolved - that no PI will issue. But MNTA has made a very respectable presentation. They appear to have an even better chance of prevailing after trial than I previously thought.

IF the PI issues: The court will set a bond, call it $200M and review it for changes if too much time passes. Fortunately, since interest rates are low and NVS/MNTA have deep pockets.

ij