Replies to post #136732 on Biotech Values

[zipjet]

>>If they have satisfied themselves with Amphastar's ability to make good, Watson is taking little risk in moving full steam ahead IMO.

There is no way that "if" can result in result in belief that WPI can offload the risk on Amphastar.

JMO

ij

[iwfal]

If they have satisfied themselves with Amphastar's ability to make good, Watson is taking little risk in moving full steam ahead IMO.

Based upon an earlier board assessment of A* there is no chance that Amphastar can make good on >$4B ($1.3B x 3).

Calculation of damages is pretty straight forward:

Was about 1/2 of 500M/Q market - i.e. about $250 million per Q of M/N revenue and at 68% GM about $170M GP.

After launch of A* and AG the total $ value of Lovenox market shrinks due to price cuts - say to $400M/Q. M/N gets 1/4 of that - so $100M/Q. And due to price cuts of 30% the GM drops to 55% so GP is 55M per Q for M/N. I.e. M/N lose about $115M/Q which, over three years (minimum durability of the patents IMO), is >$1.3B.

Note that although I assume price drops 30% the market for Lovenox drops only 20% due to price cut inducing more scripts.