Pershing Square Activist Presentation Deck
"Patent Cliff" vs. "Durable" Drugs/Medical Devices
► Patent Cliff Products
■ A patent provides a legal monopoly to the inventor of a drug or
medical device for a limited period of time
■ During the period of patent exclusivity (usually 20 years from the
filing of the patent application), superior profit margins are possible
(and necessary to recoup the cost of developing the drug/device)
■ On the day the patent expires (the "patent cliff"), low-cost, generic
products can enter the market. If generics enter, sales of more
expensive, previously patented products usually decline
substantially
► Durable Products
■ Do not depend on the legal monopoly afforded by patents for their
market position
■ Similar to consumer packaged goods
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