Sepracor-Looks very promising Message Board

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Biotech / Medical : Sepracor-Looks very promising

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To: IRWIN JAMES FRANKEL who wrote (3233)	6/7/1999 1:22:00 PM
From: Art Vandelay AIA	Read Replies (2) of 10280

Your concept that Xopenex is priced "proportionately to the nebulized form already on the market" isn't a no-brainer. The pricing of Xopenex is a strategic decision: generic level means lower margins and higher volume, while branded level means higher margins and lower volume (duh!). Arguably, Xopenex may warrant a higher price than either. Profit maximization is dependent on monopoly power, which is a function of product differentiation, and that's strongly influenced by the actual action of the drugs (how much better it is), as well as marketing and the availability of substitutes. Now that I've told you why an estimate is just that, I'll tell you mine, based on current pricing: 35%. Management has indicated that they expect much better results, but I'm trying to be conservative. Also, where did you get the $2.4MM number? Recall that the market size is a function of (among other things) price and dosage, such that a cheaper drug with greater duration or efficacy would reduce the market size. Have a nice day.

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