Momenta Pharmaceuticals' CEO Discusses Q1 2013 Results - Earnings Call Transcript

Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA)

Q1 2013 Earnings Call

April 30, 2013 10:00 am ET

Executives

Lora L. Pike – Head-Investor Relations

Craig A. Wheeler – President, Chief Executive Officer and Director

Richard P. Shea – Chief Financial Officer and Senior Vice President

Analysts

Ami Fadia – UBS

Ritu Baral – Canaccord Genuity

Sumant Kulkarni – Bank of America/Merrill Lynch

Eric Schmidt – Cowen & Company

Operator

Good day, ladies and gentlemen, and thank you for your patience. You’ve joined the Momenta Pharmaceuticals First Quarter 2013 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference may be recorded.

I would now like to turn the call over to your host, the Senior Director of Investor Relations and Corporate Communications, Ms. Lora Pike. Ma’am, please go ahead.

Lora Pike

Thank you, Karen, and good morning everyone. We thank you for joining us today for Momenta’s conference call to discuss our corporate update and financial results for the first quarter of 2013.

Today’s call is being webcast and you can view the slides we will be presenting in the investors section of our website at momentapharma.com. Joining me on the call are Craig Wheeler, President and Chief Executive Officer, and Rick Shea, Chief Financial Officer. Dr. Jim Roach, our Chief Medical Officer is also with us today and will be available to answer questions following our prepared remarks.

Before we begin, I’d like to mention that our call today will contain forward-looking statements about management’s future expectations, beliefs, plans, and prospects. These forward-looking statements include comments about our corporate goals and strategies, expectations regarding the company’s future revenues including enoxaparin revenue and milestone revenue, expenses and results of operations, our profitability, expectations regarding our view of M356 ANDA by the FDA, expected or achievement of product development milestones, the timing of legal developments and decisions, and plans for future research and development investments, and/or other product development and research plans.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors referred to in the Company’s Annual Report on Form 10-K for year ended December 31, 2012 filed with the Securities and Exchange Commission under the section "Risk Factors," as well as other documents that may be filed by Momenta from time to time with the SEC. As a result of such risks, the Company’s actual results may differ materially from those results we discussed in. We are providing information on this conference call as of today’s date and we assume no obligation to update these comments.

With that, I will now turn the call over to Craig.

Craig A. Wheeler

Thank you, Lora, and welcome everybody. And before I begin, I just want to everybody know, we have a power outage here in Cambridge. So, I huddled around the phone, so the sound quality isn’t as good as normal, I apologize.

This morning I’ll update the status of our programs and Rick will discuss financial results for the first quarter of 2013. I’ll start within enoxaparin. Enoxaparin market continues to face competitive headwinds. For the first quarter of 2013, we reported enoxaparin product revenue of $5.4 million.

Sandoz reported first quarter enoxaparin net sales of $47 million, a significant decrease from Sandoz’s fourth quarter 2012 enoxaparin net sales of $85 million. The decrease primarily reflects the continued impact of competitive pricing and lower unit sales. Rick will provide additional context in his remarks, but clearly the enoxaparin market remains competitive.

In the enoxaparin litigation with Amphastar and Actavis, as a result of the appellate court ruling that Amphastar’s use of our patented manufacturing method is protected by the Hatch-Waxman Safe Harbor, the case was remanded to the District Court; Amphastar filed a motion for summary judgment earlier this year as did Teva in a parallel suit. The District Court is considering our discovery motions prior to considering Amphastar’s motion for summary judgment. The schedule for briefing that motion has not been set. Both arguments on Teva’s motion is scheduled for May.

In February, we filed for third petition for Supreme Court review and in April the Supreme Court issued a request to Amphastar to respond and their response is due in May. We intend as planned to continue our efforts to overturn the Appellate Court’s Safe Harbor Ruling. However, there is no guarantee that we’ll be successful on our appeals and it is clear that the additional process will take a considerable amount of time.

Turning now to M356, our generic version of Copaxone, the ANDA is under active FDA review and we remain confident that M356 is approvable under the 505(j) pathway as an interchangeable generic Copaxone. We are fully committed to working with the FDA to support their continued review of the ANDA.

We are also engaging with the review staff to assure that the review process is not adversely impacted by the ongoing changes of the FDA. As you may know, the FDA has named Kathleen Uhl as the new head of the office of generic drugs and is reorganizing some departments and shifting the reporting relationships to a good number of the review staff. Announced actions include the elevation of OGD to a super office and the formation of a new office of pharmaceutical quality to oversee drug quality throughout a product lifecycle.

Janet Woodcock has stated the intent of the reorganization and took buying skills in the agency to ensure higher quality execution and focus, and to better strengthen the management structures as FDA began to add new staff funded by the generic and biosimilar user fees. While change can create some uncertainty, we are communicating with the FDA and are hopeful these changes will not impact the timing and profit of the ANDA review.

Turning now to the Copaxone patent litigation, Momenta Sandoz and Mylan appealed last year’s District Court decision of holding Teva’s Copaxone patent. And the Appellate Court has scheduled oral arguments next week on May 7. This date should put a contract for CAFC decision in the second half of this year. Our Appellate brief set up the reasons why we believe several legal errors led to an incorrect result in the District Court on the issues of indefiniteness, enablement and non-infringement have recently found on the Appellate Court’s docket and I encourage interested investors to read them. While we believe these arguments are compelling, I must emphasize we cannot predict the outcome of the appeal.

On the biosimilars front, our program in collaboration with Baxter continues to advance three biosimilar products. M93 a biosimilar for branded biologic indicator for autoimmune and inflammatory diseases is our most advanced biosimilar and we are working towards the 2014 IND submission. In addition, we’re working towards achievement of minimum development criteria of milestones in 2014 for two candidates. MA34 also indicated for autoimmune and inflammatory diseases and M511 an oncology antibody.

There has been press recently about the challenges biosimilar developers are facing. Many of the setbacks reported publicly are consistent with our expectations. Developing a biosimilar is technically challenging and many aspects of the regulatory pathway are still uncertain.

We see this uncertainty as an opportunity that we can take advantage of enabled by the deep investments we have made over the past 10 years, our in-depth analytics allow us to gain a detailed understanding on the brand product and to enable us to guide process development towards the goal of any changeability. We believe that this quality by design approach coupled with total biocharacterization offers us the opportunity, gives the FDA emerging regulatory guidelines to both reduce the scope of clinical trials required and to seek the interchangeability designation.

I like to highlight a comment from the FDA in a paper published in the March issue of Nature Biotechnology titled scientific considerations and review and approval of generic enoxaparin in the United States. The paper reviewed the scientific challenges and approving a generic Lovenox candidate without requiring clinical safety or efficacy data.

In the paper the FDA commented on the application of their process to their review of biosimilar application saying and I quote, “the extensive analytical characterization carried out for enoxaparin will be important in the evaluation of protein products and may help to reduce the scope in extent of animal and clinical studies for biosimilars.” We continue to believe that Momenta’s strategy for development of our biosimilar biologics are aligned with the FDAs approach and their public comments.

I’ll now move to our novel program. Today, we announced that we will amend the Phase 1/2 M402 study to incorporate Abraxane as part of the standard of care regimen to be administered in combination with gemcitabine. This decision is based on the promising Phase 3 data generated in the study of Abraxane in combination with gemcitabine in metastatic pancreatic cancer.

We made the change to the protocol, because with the consultation with our lead investigators and key opinion leaders, it is clear that standard of care is evolving towards Abraxane/gemcitabine combination in first line therapy for metastatic pancreatic cancer. Our investigators are enthusiastic of the opportunity to offer patients that this new treatment regimen in combination with M402 and we expect enrollment will be strong.

As a result of the amendment and the lead time required to implement the protocol changes, we now expect to have data from Part A of the study from the first half of 2014 rather than this year. Part B is planned as a randomized, controlled study to evaluate the antitumor activity of M402 in combination with Abraxane plus gemcitabine, versus Abraxane plus gemcitabine alone.

Finally our latest novel program is our sialylated IVIG program. In 2012, we successfully demonstrated the sialylating Fc-linked glycans of IVIG antibodies to enhance anti-inflammatory effects in the preclinical model.

In 2013, our first objective is to investigate the biology of sialylated IVIG to inform our selection of the best indications take forward into our initial clinical proof-of-concept trial. Our second objective is to define a specific product or products we will consider presenting into the clinic.

As a reminder, there are two ways to apply the technology of sialylated, plasma-derived IVIG product or a recombinant sialylated Fc product. We are investigating both approaches and expect to have data later this year that will help guide our development efforts.

In closing, as I said at the beginning of the year, 2013 is the year of execution across all aspects of our business. We have a technology approach validated by the approval and commercial success of enoxaparin. We believe that our ability to embrace the inherent complexity of diseases and the medicines used to treat them creates dark product opportunities and offers us the potential to create significant value for the company and for our shareholders. I look forward to keeping you informed as our program is done.

Thank you and I’ll now turn the call over to Rick.

Richard P. Shea

We reported a net loss for the first quarter of $24.1 million, this compares to a net loss of $5 million for the same quarter last year. Year-over-year change is primarily driven by lower Sandoz net sales of enoxaparin, due to the loss of generic enoxaparin exclusivity and the change in the product revenue structure from a hybrid profit share royalty in last year’s quarter to a royalty in this year’s quarter.

Operating expenses were slightly higher this quarter compared with the same quarter last year, due to higher R&D expenses to support advancements of our biosimilars and novel product programs. Revenues for the first quarter totaled $7.6 million and included $5.4 million in Enox product revenues and $2.2 million of R&D collaborative revenues. Sandoz reported first quarter net sales of $47 million for enoxaparin, down from $176 million reported in the same quarter last year, and $85 million reported for the fourth quarter 2012. During the first quarter, Sandoz reported enoxaparin market share dropped slightly. The decrease from last quarter’s enoxaparin sales was primarily due to lower unit sales to existing customers and continued price reductions.

Turning to R&D collaborative revenues, we expect that the expense reimbursement from Sandoz under our Enox and generic Copaxone collaborations will continue with the $1 million to $2 million per quarter rate in 2013 and the amortization of the 2006 Sandoz equity premium and the Baxter upfront payment will be consistent with prior quarters.

For R&D, first quarter 2013 R&D expense, including stock-based compensation was $22.3 million compared with $18.6 million in the first quarter of 2012. The major increases included $1.7 million of increased head count and related expenses, $1.8 million in contracted manufacturing and research related to our biosimilars and novel products programs, including the M402 clinical trial expenses.

Our G&A expense for the first quarter, including stock compensation was $9.7 million, a decrease from $11 million in the same quarter last year, primarily due to lower litigation expenses and a lower royalty payable to MIT on enox product revenues.

Our guidance for 2013, total operating expenses is unchanged. We continue to expect total operating expenses, excluding stock compensation and net of collaborative revenues will average approximately $30 million per quarter. We’re also continuing to project the 2013 quarterly net cash usage with low average approximately $20 million to $24 million or approximately $80 million $90 million for the full year.

For comparison, our unrestricted cash balance decreased from $340.6 million at December 31 to $324.2 million at the end of the first quarter for a net cash burn for the first quarter of $16.4 million. In the first quarter, we did get the cash benefit of collecting our $10 million year end receivable from Sandoz.

Finally, I’d like to comment on the shelf registration, we filed today with the SEC, the new universal shelf that replaces the similar registration statement filed in 2009, and that expired in December.

Shelf filing is normal course of business to maintain financial flexibility, we view the shelf as a housekeeping item, we intend to manage our projected net cash burns through 2015 by offsetting any potential decreases in Enox product revenue, and planned increases in net operating expenses with the anticipated milestone and license payments from Baxter under our biosimilar collaboration. This concludes my financial review.

I’ll turn it over to Craig for final comments.

Craig A. Wheeler

Thanks very much, Rick, and I think we’re ready for questions at this time.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from the line of Ami Fadia from UBS.

Ami Fadia – UBS

Hi, thanks for the question. I wanted to see if you could give us an update on your confidence level around the approval of Copaxone this year. You did comment on it a little bit during your prepared remarks, but if you could give us any color around whether there has been further progress around your discussions with the FDA, that would be great. Specifically, and in terms of your cash burn, is there a point of time in the future may be in 2015, if the approval of Copaxone still gets delayed, what is your Plan B in terms of managing the cash flows? Any commentary on that would be great. Thank you.

Craig A. Wheeler

Thanks for the question. First on Copaxone, I do want to emphasis we’ve never given guidance. We’re going to get approved this year. But I think our enthusiasm for the progress of our application has not decreased. We do think it’s still approvable (inaudible) we still are in interactions with the FDA. I did though, in script as you noted put in comments, because I do want to register that we do have – we are paying attention because you always have concerns in your applications and when the FDA announces a major reorganization.

So we’re paying close attention to that, and we’re hoping that, that doesn’t cause too much of a bump in the road for us or any other applications. I can assure you that all the other generic companies are paying attention to the same thing. But I did want you to be aware that the FDA is doing major reorganizations, and so we’re paying attention, we want to make sure you guys are aware of it as well.

In terms of cash burn, it’s an interesting question, if we didn’t have approval in 2015 with Copaxone, what will we do? Well probably, obviously we have to watch our cash burn very closely. We’d also have to look at our cash position. Our intent is to get this drug approved, and be able to launch it at the outside when the patents expire.

So that’s how we are managing our business. So if we didn’t have that drug approval at the time, I’m sure you’ll see a mix of thinking about how we’re going to make sure we have that cash balance in the appropriate place, and how we’re going to manage our costs.

Ami Fadia – UBS

Thank you.

Craig A. Wheeler

Sure.

Operator

Thank you. And our next question comes from the line of Ritu Baral from Canaccord.

Ritu Baral – Canaccord Genuity

Thanks for taking the question guys. Craig, could you remind us again on sort of the meeting roadmap with FDA, and requirements for biosimilars as they stand as you understand them now with the changes that have gone on in the pre-IND portion, which compared to I guess normal drug development is very pre-IND having and are the goals changing as far as clinical trial requirements for post 2014 IND?

Craig A. Wheeler

Yeah, so first let me address the goals question first. Our goals are not changing, and that we’re working aggressively to try to make sure we can take advantage of any opportunity FDA gives us to use our characterization data and our process skill to reduce clinical trials. Now that’s unproven with the FDA. So we’ll have to see how that evolves as they begin to review these outpatients.

In terms of the meeting process, the first thing is that that FDA has put a lot of meetings in advance of – as going into the clinic that are available to companies, the first thing to note about those meetings is that, they are all optional. They have kind of these meetings that are basically to address specific issues and get feedback of these initial meetings that you could have, the clinical meeting of this Type 3 meeting from our perspective where you basically provide your whole package if you will, your analytic package about characterization, your toxicology work, your process, and then basically have a dialog with FDA after they review that, about the clinical trial path the possibility of reducing those trials and the possibility of substitution.

So these are all meetings and are optional for companies. So we intend to take full advantage of meeting, opportunities to make sure we can get our points across in our application. But it is early days, you have to figure out exactly how the FDA is going to use all these meetings, and I think the companies and the FDAs are all dancing a little bit, now trying to test up the process.

Ritu Baral – Canaccord Genuity

And we assume that you would have a Type 3 meeting sort of in the six month timeframe before filing a successful IND, is that when a Type 3 meeting might occur?

Craig A. Wheeler

Yeah, that’s reasonable. And as we’ve said, that we are seeking to file an IND in 2014 for first, and so that’s probably reasonable in terms of the timing.

Ritu Baral – Canaccord Genuity

Okay, and one quick follow-up question, about your sialylated IVIG product, could you walk us through how we might be thinking of regulatory challenges and CMC COGS issue of a plasma-derived product verus recombinant product?

Craig A. Wheeler

Well. That’s a good question. I’m not sure I’ve all the answers for you right now. Obviously, if you are – the development pathway, I think is going to be the same. This is a new drug, its not going to be considered as a – I don’t believe approved under the 505 (b) (2) or something like, because we’re changing the structure with sialylation correct.

So, but think that as a – as that kind of pathway with recombinant or plasma. Now what that means then is you are looking at different potential COGS scenarios and different supply chains, whether using a plasma-derived program or say a recombinant program. And I don’t have the data to be able to give you good comparison because it depends on if we are doing a recombinant program, how we get the transaction?

What kind of yield we get et cetera and that’s way down the road yet, obviously on the size of your - we have to find an alliance or source of plasma to be able to make sure we could get what we needed to be able to do the sialylation. If we can achieve our objective of getting a significantly more potent IVIG we have to use less of it. I think on the plasma-derived side, the COGS should take care of themselves because we make sure to be able to use less IVIG, but those are all no if at this point in time is we’re taking this programs to research and trying to get towards the clinic.

Ritu Baral – Canaccord Genuity

Great, thanks for the color. I appreciate it.

Craig A. Wheeler

Sure.

Operator

Thank you. And our next question comes from the line of Sumant Kulkarni from Bank of America/Merrill Lynch.

Sumant Kulkarni – Bank of America/Merrill Lynch

Well good morning, thanks for taking my questions. First, couple of simple ones on Lovenox or generic Lovenox that is, do you ever see pricing going back to A, rational level given that there are only three players in this market?

Craig A. Wheeler

Well I would like to say – I would love to see that, but behavior of the market so far hasn’t indicated that that’s happening. I think the now that people have competed in this market for share with price and I think it’s very hard once you’ve done that and given that price of customers go back and take it back. It’s theoretically possible I imagine, but the behaviors I’ve seen in this marketplace will make out a very, very difficult prospect indeed.

Sumant Kulkarni – Bank of America/Merrill Lynch

And on the Enoxaparin Safe Harbor case, given the potential importance of the case to industry, do you expect any unexpected space to be filed there to support your standing?

Craig A. Wheeler

I would expect that you would see a fair amount of activity as the Supreme Court decides to take the case. As you remember, what we have said before is that, we believe this will ultimately give a turn. We are hoping it will do with our case, but there maybe several ways that the Supreme Court considers this. Our case is a good one as you know because of the reasons why the stay was lifted. We’re very clear interpretations of the reading of it.

But the challenge with our case is we have a case that we’ve never tried. They don’t have all of the District Court records and all the Appellate Court records to fall back onto the Supreme Court. So, I think people will wait and see what happens and then we will probably get much more activity if the Supreme Court does pick up our case.

Sumant Kulkarni – Bank of America/Merrill Lynch

Sure. And moving onto biosimilars, is the IND going to be filed under the new pathway or is it going to be a regular BLA, I am just confirming that?

Craig A. Wheeler

We intend to use 351(k) pathway.

Sumant Kulkarni – Bank of America/Merrill Lynch

And you mentioned or you alluded to some of the other industry players taking parts on the biosimilar front. Do you think that is more due to technical challenges or because of some level of reduced commercial opportunities that they might see given out, as this is evolving?

Craig A. Wheeler

I think there is probably two reasons here, I would say that, I don’t see the commercial opportunity has reduced at this point in time, but what I do see is, there is more or at least clear regulatory uncertainty, it’s – people don’t know how long it’s going to take for that regulatory pathway to evolve and so I think that’s maybe giving some people cause. The second thing to keep is mind is that if the FDA as I said repeatedly is setting a pretty high analytic standard for these products and many of the early products that people are trying to bring in to this process were products that probably didn’t have a lot of effects there and trying to get that the exact to the place of FDAs and with the analytics, and that’s what we think we have our competitive advantage.

So I’m not surprised if you remember, if you go back even two years ago everybody thought the cell lines and everything it’s now starting to become more ordered market, but I think what you’ll find is that it’s going to be ecstatic competitors that have high technical capabilities to be able to move the FDA ultimately everyone that prevail here.

Sumant Kulkarni – Bank of America/Merrill Lynch

Sure. And my last question is more of a conceptual one. On your biosimilars, given that Momenta is approaching the whole thing from somewhat different standpoint, if potentially interchangeability, and how important the characterization is for you.

Have you considered that the FDA may not trap that on to around what you are saying, so on your first IND are you considering taking a parallel pathway, where you do one set of things based off of characterization and a similar conventional thing in the background in terms of a trial plus characterization.

Craig A. Wheeler

To imagine that what’s going to happen in these first programs as this is going to be an exploration in terms of how to work with the FDA as I said before. Whether they will be able to review all of this in the three months period and give us very clear answers, we will see. If they don’t, I think our intent would be to start trials in parallel with the discussions with them to continue to try to get our data forward and reduce clinical trials in the later stages of the clinical effort. But I don’t think it will ultimately go smoothly in the first instance here.

The advantage I’d point out is that, when we have taken forward enoxaparin and then taken forward Copaxone, we’ve taken drugs forward in entirely different class with very different analytic profiles that we assess and sometimes educate the FDA on. If we are going into biologics, we actually have the opportunity to capture scale. So the first one may be challenging to try to work through the FDA, which we would ensure to do parallel clinical trials, but the second to third out show is going to look very similar to the first versus the math of differences between heparin and a synthetic polypeptide. So we do see that there is going to be strong earnings, where we will be able to take advantage over the FDA here.

Sumant Kulkarni – Bank of America/Merrill Lynch

Okay.

Operator

Thank you. And our next question comes from the line of Eric Schmidt from Cowen & Company.

Eric Schmidt – Cowen & Company

Good morning. Just wanted to continue on the discussion of the biosimilars approach you are taking at the FDA. Craig, how many of the high quality and analytically driven firms do you think are competing in biosimilars?

Craig A. Wheeler

It is hard to fully categorize them, but I would certainly say Sandoz in that category. I would sometimes put our Amgen, but I think they are competing in a little bit different of a style. But we have to have that commitment to spend the money and the capabilities to be able to do things. I think that Sandoz is certainly showing their capability. They obviously learned a lot from what we’ve done with them and I think that give them a pretty serious type of competitor.

Eric Schmidt – Cowen & Company

What do you think will – will as investment community kind of get the sense that this higher quality approach matters that the FDA, and Momenta, Sandoz, some of the others are kind of being treated a little bit differently?

Craig A. Wheeler

I honestly, I think it’s going to take time. It’s going to be an incremental education where you’ll, you will get signals, we will start things and then you will have to look at where competitors stand, the FDA is going to learn things. So, I don’t think it’s going to be a quick process to be honest with you. I think it’s going to be one where you have to look at the incremental edges that have been gained filed for reduce.

If you’re able to actually get our quality packages a little quicker, if you get towards interchangeability, but it’s going to evolve, it’s not going to be something where we’ll get a Type 3 meeting and should be able to say, what we see where the competitive advantage is.

We built our strategy here intentionally with that in mind and that we have that buy-up component of the Baxter deal, where if it looks like it’s paying off early we can actually co-invest and get that added advantage for late approval products.

And we also are very much intending to take advantage to kind of drive our costs low, when we’re working with Baxter; so that we can if we are in a competitive marketplace still have reasonable product, even if we don’t see ultimately what is the differentiation.

Eric Schmidt – Cowen & Co.

I guess going with the next question is if there is no competitive advantage at least for the foreseeable future, no competitive advantage of these superior characterization. Is this – is this a good business for you and Baxter to be competing in?

Craig A. Wheeler

Well, we think it is a good business, because it’s not going to be a business where there is no profit. We think it’s going to be more profit than the additional generic business, and Baxter has probably one of the strongest contracting footprint in the industry and has probably one of the largest global presence that has manufacturing on three continents.

And there are low cost focus companies, where most of their products are multi-sourced. So we chose them with the understanding that this ultimately would be a competitive market, we’re going to try to take full advantage of the opportunity to differentiate our products like we do with Enoxaparin, but we also want to make sure that it is profitable business as that market evolves or if for some reason, we weren’t able to be successful with the FDA. So, it is a decent business for us in any scenarios, but very good business for us if we would succeed with our differentiation approach.

Eric Schmidt – Cowen & Co.

Okay. Thanks for that. If you could just give it for a moment to the Lovenox parent franchise and a pretty significant quarter-on-quarter decline, it sounds like Rick that is mostly pricing is that right, was there any, I don’t know one-time items shipping changes, inventory distribution issues that worth noted in that decline?

Richard P. Shea

Eric it was about half volume and half pricing as far as the change from Q4 to Q1. So, existing customers just took less products in the first quarter than they did in the fourth quarter.

Eric Schmidt – Cowen & Co.

Was that because it was less end user, did you actually have lower competitors and users share or was it just timing of shipments?

Richard P. Shea

The share only came down slightly, so I think in general the customers had higher inventory levels at the end of the year.

Eric Schmidt – Cowen & Co.

Got it. Thanks. And last question on the financials, the change in the cash burn use from $80 million to $90 million, is that because you got that $10 million receivable in the quarter or your low burn rate in the quarter?

Richard P. Shea

Well, just we’re saying that cash burn will average $20 million to $24 million. So over the course of the year, we will be somewhere at $80 million to $90 million range, yeah.

Eric Schmidt – Cowen & Co.

Okay, thanks.

Operator

Thank you. And our next question is a follow-up from the line of Ritu Baral from Canaccord.

Ritu Baral – Canaccord Genuity

Thanks for taking the follow-up. In your conversations with FDA about generic Copaxone, has the – is the issue of A, B or interchangeability been addressed at this point or is that something that will come up in future, future talks as the application progresses and…

Richard P. Shea

Application has always been treated as a substitutable product. So, we’ve never had any indication that they are moving in any different direction than that.

Ritu Baral – Canaccord Genuity

Got it. And is that, is that sort of a requirement for Momenta and Sandoz around this product, it sort of a, b or nothing?

Richard P. Shea

While, I guess if they have proved us and they told us they are going to have an approval, we probably take what can, but the intent is to have them and the pathway is designed to give full substitutable product.

Ritu Baral – Canaccord Genuity

Got it. And last question. Would the pathway allow for a post marketing trial requirement, even if it was just safety?

Richard P. Shea

Yeah, that’s a good question and I don’t know the specific answer to that. I do know that the FDA took great care in their last response to Teva, that they could view whatever criteria they wanted to use and deemed appropriate to be able to approve the product.

I would assume that they could use anything that they wanted in their arm of inventory, but I don’t know the specific answer.

Ritu Baral – Canaccord Genuity

Great, thanks for taking the follow-up.

Operator

Thank you. And I see no further questions at this time. I would like to hand the conference back to Mr. Craig Wheeler for closing remarks.

Craig A. Wheeler

Okay, thanks everybody for joining us and bearing with us on the [Harrod] Sound System here, I appreciate it. We look forward talking to you next quarter.

Operator

Ladies and gentlemen, that does conclude our question-and-answer session and today’s Momenta Pharmaceuticals first quarter 2013 earnings results conference call. Thanks for your participation and have a wonderful day. You may disconnect your lines at this time.

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