Craig Wheeler - President & Chief Executive Officer
Rick Shea - Senior Vice President & Chief Financial Officer
Beverly Holley - Director of Investor Relations
Momenta Pharmaceuticals Inc. (MNTA) Q1 2010 Earnings Call May 6, 2010 10:00 AM ET
Good day ladies and gentlemen and welcome to the Momenta Pharmaceuticals, first quarter 2010 earnings conference call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions)
I would now like to introduce to our host for today’s conference, Ms. Beverly Holley, Director of Investor Relations; ma’am you may begin.
Thank you, and good morning. I want to welcome all of you to Momenta’s conference call to discuss financial results for the first quarter of 2010, and provide a corporate update.
With me on the call today with prepared remarks are Craig Wheeler, President and Chief Executive Officer; and Rick Shea, Senior Vice President and Chief Financial Officer. Following our remarks we will open the call to questions.
Before we begin, I’d like to mention that our call today will contain forward-looking statements. Various remarks that Momenta Pharmaceuticals may make about management’s future expectations beliefs, intentions, goals, strategies, plans or prospects, including statements relating to the FDA’s review and inquiries regarding generic Lovenox, regulatory submissions, our product development plans, the company's revenue expenses and other results of operations, including the quarter and year ended March 31, 2010, and current and future development efforts and commercialization efforts, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by terminology such as anticipate, believe, could, could increase the likelihood, hope, target, project, goals, potential, predict, might, estimate, expect, intend, is planned, may, should, will, will enable, would be expected, look forward, may provide, would or similar terms or variations of such terms or the negative of those terms.
Such forward-looking statements involve known and unknown risks, uncertainties and other factors referred to in the company's quarterly report on Form 10-Q for the quarter ended March 31, 2010 filed with the Securities and Exchange Commission, under the section Risk Factors, as well as other documents that maybe filed by Momenta from time-to-time with the Securities and Exchange Commission.
As a result of such risks, uncertainties and factors, the company's actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein.
Momenta is providing the information in this press release as of this date and assumes no obligations to update the information included in this, or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
With that, I will now turn this call over to Craig Wheeler, Momenta’s President and Chief Executive Officer.
Thank you Beverly, and good morning everyone, and thank you for joining us. We are going to keep our formal remarks short today. We will provide a quick update on corporate developments and financials, and then move on to Q-and-A.
The M-Enoxaparin ANDA is still under review by the FDA. We have continued to address technical and regulatory questions if they are asked by the FDA, and we remain optimistic that the decision will come in the near term. We believe our application meets all the requirements for approval, and also addresses the issues raised in the Citizen’s Petition.
While approval of the M-Enoxaparin ANDA cannot be assured, we do believe we are well positioned for a positive action. Should an approval be granted, we and Sandoz are prepared to launch and intend to launch as soon as possible following the FDA’s decision.
I will now discuss M356, our generic version of Teva’s Copaxone, which we are developing in collaboration with Sandoz. The ANDA for this product was submitted in 2007, and the FDA review is currently well underway. As we have discussed previously, Teva filed a patent infringement suit against us and Sandoz in August of 2008. The case is in proceeding in the US District Court.
On January 20 a Markman hearing was held, and in the Markman hearing the court considered and then construed the patent claims at issue in the case. As a reminder, there are nine patents in dispute, and they are all related. At the hearing, both Teva and Sandoz Momenta presented arguments concerning the proper definition for several terms in Teva’s patent claims.
In addition some of the Sandoz Momenta testimony centered on whether Teva had adequately defined certain key terms in the patent. Although we are not going to comment on the specifics of the argument, we believe that our attorneys presented a very strong case. We look forward to the judge’s ruling on the Markman hearing.
Because Sandoz Momenta filed a summary judgment motion prior to the hearing, the court also has the opportunity to determine that the patents are invalid, which would negate the need for a full trial. Alternatively the case will move forward to a trial which could be scheduled for the second half of this year.
I’ll now turn to M118, our rationally engineered anticoagulant. In April we announced the results of the M118 eminent clinical trials were published in the journal circulation. The key conclusions in the paper is that the eminent study, M118 was well tolerated, and provided further evidence of its feasibility for use as an anticoagulant in patients undergoing selective percutaneous coronary intervention.
The office further concluded that the data provides the basis for further investigation of M118 and ischemic heart disease. We continue to believe that M118 has the potential to become a baseline anticoagulant of choice for the treatment of patients with acute coronary syndrome, regardless of treatment past and we are actively seeking a collaboration partner to finance and support the further clinical development of M118.
Our second novel product M402 is a heparin sulfate proteoglycans based drug targeted to oncology. Our experience with M118 and M-Enoxaparin has facilitated developing the tools necessary to understand and exploit the broad therapeutic potential of heparin and related molecules.
Many complex diseases including cancer and many inflammatory disorders are caused by disruption in multiple biologic pathways. Applying these tools allows us to tailor products such as M402 that has the potential as a single agent to modulate multiple targets involved in the disease process.
In April we announced the poster presentation of M402 preclinical data at the American Association of Cancer Research annual meeting, and in this study, mice that spontaneously developed pancreatic cancer were treated with twice weekly doses of either gemcitabine, M402, or combination of gemcitabine plus M402 well with same in placebo.
The combination of M402 and gemcitabine significantly improved survival and substantially lower the incident of metastasis, compared to mice treated with gemcitabine alone. We are now conducting activities in support of a future INB submission for M402 and we hope to see the product candidate enter the clinic in the first half of 2011.
Next, I would like to discuss Follow-on Biologics. As you know, healthcare reform legislation has been passed, that establishes a regulatory pathway for the FDA to approve Follow-on Biologics. The new legislation will allow the FDA to establish its own criteria for determining bio-similarity and interchangeability. In addition it allows the FDA to use its discretion to determine the nature and extent of product characterization, as well as non-clinical and clinical testing on a product-by-product basis.
We are pleased with these provisions and expect that they will prove to be an advantage for Momenta. We are less pleased with the 12 year marketing facility and the lack of an honorable patent system. However, despite its limitations the passage of the bill means we can now move forward with our FOB development program with greater clarity.
To achieve our goal to develop and commercialize a portfolio of competitive follow-on biologic products, our FOB program will require scale and significant capital. So we are continuing to engage in discussions with potential collaborative partners.
I should note that we are adapting our biologics tool to explore the development of novel biologics, to lay the foundation for future products there as well. We are excited by the progress we are making in engineering biologic products, and continue to believe this program represents a significant opportunity for the company, for both FOBs and novel products.
I'll now turn the call over to Rick to provide a quick financial update.
Thanks Craig. Collaborative revenue for the first quarter of 2010 was $3.7 million, compared to $4.0 million for the same period last year. A small decrease in collaborative revenue was due to a decrease in expenditures reimbursable by Sandoz for our M-Enoxaparin and M356 program.
Research and development expense for the first quarter of 2010 was $12.3 million compared to $15.8 million for the same period in 2009. The decrease in R&D expenditures is primarily due to the completion of the M118 Phase IIa clinical study in the first half of 2009.
The net loss for the first quarter of 2010 was $16.1 million, a loss of $0.37 per share, compared to a net loss of $17.9 million or a loss of $0.46 per share for the first quarter of 2009. The decrease for the net loss for the quarter was a result of a decrease in self funded R&D expenses, offset by an increase in non-cash stock compensation.
We ended the first quarter of 2010 with $81.7 million in cash and marketable securities, compared with $95.7 million at the beginning of the year. Our cash burn for the first quarter was $13.9 million.
Typically our cash burn is higher in the first quarter due to the payment in the first quarter of larger year-end balances of accounts payable and accrued expenses, and those balance sheet changes accounted for just over $2 million of the change in cash for the quarter. So, on a run rate basis our quarterly cash burn for 2010 will be approximately $11 million to $12 million, excluding any new collaboration.
We continue to manage our expenses for that under any scenario. Our cash burn does not exceed approximately $50 million for the year. Of course we are very hopeful that the approval and launch of M-Enoxaparin will provide additional cash flow in 2010.
This concludes my financial review. We'll now open the call to questions.
Thank you. (Operator Instructions) I'm showing no questions at this time.
Okay, well if there’s no question. We’ll just give it a couple of more seconds to see if anybody wants to login, otherwise we’ll conclude the call.
Alright, well thank you very much for joining us then. We look forward to updating you on our progress in the coming months. Thanks and goodbye.
Ladies and gentlemen, thank you for participating in today’s conference. That does conclude the program. You may now disconnect. Everyone have a great day.
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