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I'm looking for economic terminology which must exist, although I don't know what it is. (I want to look up articles on a particular situation involving two real-world companies.)

Here is the situation: Company A is developing a diagnostic test which will warn of a particular type of deadly antibiotic resistance. Company B is a pharmaceutical company developing a drug to treat that kind of resistance.

Is there an economic terms that describe concepts relevant to this situation? The important features are that

  1. Product B will never be bought without product A.
  2. Customers will only buy A with the intention of possibly buying B.
  3. Product B will certainly sell at a very high price if product A works perfectly, because A will identify those patients for which B is life-saving. A deserves some of this return, but the many customers buying A each will have only a low-probability of being one of the few to benefit.

Similarly, one could imagine a related case that there are exactly two bicycle wheel manufacturers, and by law A can only sell front wheels and B can only sell back wheels. There will be some sort of odd price hostility between A and B, because the two products are each useless without the other. The natural thing to happen is for the producers A and B to merge, although wrangling about the terms of a merger may make this impossible.

In my real-world case the cognizant shareholders of A should oppose any buyout by B at anywhere near current market prices, because A's technology will extend to many many other applications.

I'm looking for economic terminology which must exist, although I don't know what it is. (I want to look up articles on a particular situation involving two real-world companies.)

Here is the situation: Company A is developing a diagnostic test which will warn of a particular type of deadly antibiotic resistance. Company B is a pharmaceutical company developing a drug to treat that kind of resistance.

Is there an economic terms that describe concepts relevant to this situation? The important features are that

  1. Product B will never be bought without product A.
  2. Customers will only buy A with the intention of possibly buying B.
  3. Product B will certainly sell at a very high price if product A works perfectly, because A will identify those patients for which B is life-saving. A deserves some of this return, but the many customers buying A each will have only a low-probability of being one of the few to benefit.

Similarly, one could imagine a related case that there are exactly two bicycle wheel manufacturers, and by law A can only sell front wheels and B can only sell back wheels. There will be some sort of odd price hostility between A and B, because the two products are each useless without the other. The natural thing to happen is for A and B to merge, although wrangling about the terms of a merger may make this impossible.

In my real-world case the cognizant shareholders of A should oppose any buyout by B at anywhere near current market prices, because A's technology will extend to many many other applications.

I'm looking for economic terminology which must exist, although I don't know what it is. (I want to look up articles on a particular situation involving two real-world companies.)

Here is the situation: Company A is developing a diagnostic test which will warn of a particular type of deadly antibiotic resistance. Company B is a pharmaceutical company developing a drug to treat that kind of resistance.

Is there an economic terms that describe concepts relevant to this situation? The important features are that

  1. Product B will never be bought without product A.
  2. Customers will only buy A with the intention of possibly buying B.
  3. Product B will certainly sell at a very high price if product A works perfectly, because A will identify those patients for which B is life-saving. A deserves some of this return, but the many customers buying A each will have only a low-probability of being one of the few to benefit.

Similarly, one could imagine a related case that there are exactly two bicycle wheel manufacturers, and by law A can only sell front wheels and B can only sell back wheels. There will be some sort of odd price hostility between A and B, because the two products are each useless without the other. The natural thing to happen is for the producers A and B to merge, although wrangling about the terms of a merger may make this impossible.

In my real-world case the cognizant shareholders of A should oppose any buyout by B at anywhere near current market prices, because A's technology will extend to many many other applications.

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I'm looking for an economic termterminology which must exist, although I don't know what it is. (I want to look up articles on a particular situation involving two real-world companies.)

Here is the situation: Company A is developing a diagnostic test which will warn of a particular type of deadly antibiotic resistance. Company B is a pharmaceutical company developing a drug to treat that kind of resistance. Company A needs to raise money, and company B is a large pharma with a market cap 1000 times as large as A.

Is there an economic termterms that describesdescribe concepts relevant to this situation? The important concept isfeatures are that when both products come to market

  1. Product B will never be bought without product A.
  2. Customers will only buy A with the intention of possibly buying B.
  3. Product B will certainly sell at a very high price if product A works perfectly, because A will identify those patients for which B is life-saving. A deserves some of this return, but the many customers buying A each will have only a low-probability of being one of the few to benefit.

Similarly, one could imagine a customer will not know he need's B's product without access to A's diagnostic. Sincerelated case that there are exactly two bicycle wheel manufacturers, and by law A &can only sell front wheels and B can only sell back wheels. There will be in directsome sort of odd price competition, it is highly likely that B will buyouthostility between A at some pointand B, because the two products are each useless without the other.

This The natural thing to happen is a real-world example,for A and I'm tryingB to findmerge, although wrangling about the terms used to describe itof a merger may make this impossible.

It is to the advantage ofIn my real-world case the cognizant shareholders of A not to acceptshould oppose any sort of buyout. (Their technology will be useful in many other ways, yet the by B at anywhere near current market is not giving proper value to the long-term applications.) It could be the case that A will have a similar situation with companies C, D, ect... one day.

To make matters more interestingprices, the existence ofbecause A's diagnostic will make B able to charge a premium price for their antibiotic. In particular, the diagnostictechnology will warn the patient that he'll likely die without B's drug, upon which he'll be happily willingextend to pay whatever B asksmany many other applications.

I'm looking for an economic term which must exist, although I don't know what it is.

Here is the situation: Company A is developing a diagnostic test which will warn of a particular type of deadly antibiotic resistance. Company B is a pharmaceutical company developing a drug to treat that kind of resistance. Company A needs to raise money, and company B is a large pharma with a market cap 1000 times as large as A.

Is there an economic term that describes this situation? The important concept is that when both products come to market, a customer will not know he need's B's product without access to A's diagnostic. Since A & B will be in direct price competition, it is highly likely that B will buyout A at some point.

This is a real-world example, and I'm trying to find the terms used to describe it.

It is to the advantage of the cognizant shareholders of A not to accept any sort of buyout. (Their technology will be useful in many other ways, yet the market is not giving proper value to the long-term applications.) It could be the case that A will have a similar situation with companies C, D, ect... one day.

To make matters more interesting, the existence of A's diagnostic will make B able to charge a premium price for their antibiotic. In particular, the diagnostic will warn the patient that he'll likely die without B's drug, upon which he'll be happily willing to pay whatever B asks.

I'm looking for economic terminology which must exist, although I don't know what it is. (I want to look up articles on a particular situation involving two real-world companies.)

Here is the situation: Company A is developing a diagnostic test which will warn of a particular type of deadly antibiotic resistance. Company B is a pharmaceutical company developing a drug to treat that kind of resistance.

Is there an economic terms that describe concepts relevant to this situation? The important features are that

  1. Product B will never be bought without product A.
  2. Customers will only buy A with the intention of possibly buying B.
  3. Product B will certainly sell at a very high price if product A works perfectly, because A will identify those patients for which B is life-saving. A deserves some of this return, but the many customers buying A each will have only a low-probability of being one of the few to benefit.

Similarly, one could imagine a related case that there are exactly two bicycle wheel manufacturers, and by law A can only sell front wheels and B can only sell back wheels. There will be some sort of odd price hostility between A and B, because the two products are each useless without the other. The natural thing to happen is for A and B to merge, although wrangling about the terms of a merger may make this impossible.

In my real-world case the cognizant shareholders of A should oppose any buyout by B at anywhere near current market prices, because A's technology will extend to many many other applications.

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Economic term for relation between drug and companion diagnositic

I'm looking for an economic term which must exist, although I don't know what it is.

Here is the situation: Company A is developing a diagnostic test which will warn of a particular type of deadly antibiotic resistance. Company B is a pharmaceutical company developing a drug to treat that kind of resistance. Company A needs to raise money, and company B is a large pharma with a market cap 1000 times as large as A.

Is there an economic term that describes this situation? The important concept is that when both products come to market, a customer will not know he need's B's product without access to A's diagnostic. Since A & B will be in direct price competition, it is highly likely that B will buyout A at some point.

This is a real-world example, and I'm trying to find the terms used to describe it.

It is to the advantage of the cognizant shareholders of A not to accept any sort of buyout. (Their technology will be useful in many other ways, yet the market is not giving proper value to the long-term applications.) It could be the case that A will have a similar situation with companies C, D, ect... one day.

To make matters more interesting, the existence of A's diagnostic will make B able to charge a premium price for their antibiotic. In particular, the diagnostic will warn the patient that he'll likely die without B's drug, upon which he'll be happily willing to pay whatever B asks.