The profitability of Hextend should not be evaluated on a per liter basis but on a total sales figure. If Abbott loses 15% on each liter of Hextend as compared to hetastarch but sells 30% more then the bottom line is enhanced.
I see what you're getting at: Abbott sells Hextend for the same price as their hetastarch and pays Biotime 10%, but hopefully they sell more product. Sounds like the old "we make it up in volume" joke :). I'm not sure if such a strategy would be profitable to Abbott. But I do think that their disappointing hetastarch sales (introduced in '95) is the basis for their consideration of Hextend as a way to differentiate their starch-based expander offering.
There is a lot of discussion of the lack of 'statistical significance' of some of the purported advantages of Hextend over the generics and I understand the need for statistical significance to be reached. However, one must consider that the fault lies not with Hextend but with the study. From a non-statistically significant viewpoint Hextend was ahead in every consideration. Certainly such bias taken as a whole could not be the result of chance. Given a correct interpretation of the data I recall no area in which the generic hetastarch was statistically better than Hextend - significant or not.
I think the "better" non-SS averages for EBL, etc. in the Hextend group should also be viewed considering the Hextend group's similarly non-SS "worst" post-op platelet count. In other words, the non-SS lower amounts of transfused products (platelets, RBC, etc) in the Hextend group resulted in a lower post-op platelet count -- a wash. Also, the non-SS reduced urine output is not a good thing -- doctors want patients to purge the drugs, etc. post-op.
I think there's no inherent added-value to the Hextend formulation, and that no studies will be able to show (marketable) SS differences in any hemodynamic variable. On the practical side, Biotime may not even complete these studies, and will not have definitive data to use as a marketing tool.
Although I'm bearish on the stock, I'm expecting a continued run up in anticipation of the NDA filing. (Call it TA :) !) I think the stock might make a run to 18 or higher within the next 3-4 weeks. If this doesn't happen, I think I'll still be able to short at 15. Of course, this is only guessing. However, I think understanding the dynamics of the stock is just as important as understanding it's fundamentals (attn: Bill Wexler :)).
JMO,
Steve
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