Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA)
2014 UBS Global Healthcare Conference Call
May 20, 2014, 03:30 PM ET
Richard Shea - Chief Financial Officer and Senior Vice President
We're going to get started with our next session. We have Momenta, thank you very much for joining us. We have Rich Shea, who is the CFO of the company and has been the CFO for 10 years, right. So he's going to do a presentation in here and then we'll have the full breakout in the other room. Thank you very much for joining us.
Thank you very much, Mark. Thank you, UBS. And before I commence presentation, I'd like to draw your attention to our Safe Harbor statement and the risk factors included in our SEC fillings.
Momenta Pharmaceuticals was founded in 2001 and is located in Cambridge, Mass. And we are a leader in the analysis characterization design of complex pharmaceutical products, and we have specialized in building our portfolio of complex generics and biosimilars as well as novel drugs.
So in the area of complex generics we have partnered with Sandoz on a generic Lovenox, and we have in progress and under review at the FDA a generic Copaxone. And we are working in collaboration with Baxter on biosimilar product portfolio as well as our own proprietary biosimilar programs. And we also had a novel drug portfolio, we have oncology drug candidate in Phase 1 sialylation platform and Fc engineering platform.
So what we bring to this area of complex mixture products is, we bring a higher order level of analytical characterization and particularly the physicochemical structure, and this was the basis of the company's technology. Initially we're applying this to polysaccharide chains. In our early days we were known as the sugar company, complex sugars, and we are working on polysaccharide chains. We are working on the glycosylation on biologics.
But we have expanded that area of focus to work on polypeptides as well as fusion proteins and antibodies in the biosimilar and biologics areas. But through our understanding of the physical structure of these complex products, we met that to the manufacturing process control in order to reverse engineer generic products or to redesign novel products. And then, we also add to that biological characterization, and by that we simply mean by just analyzing the biology of products that we are working with in a detailed way.
So our generic Lovenox, we filed an ANDA in August of 2005, was approved in July of 2010. We were the first generic Lovenox. We were the only generic Lovenox on the market for 15 months. And during that time, we generated over $400 million in profit share in our collaboration with Sandoz.
And considerable savings to the healthcare system and millions of patients treated with this complex products. So in some respects we have remind people that after the time we were approved, that there was a lot of skepticism about approval of a generic Lovenox, and whether it could be done, whether it could done without clinical studies, whether it could be approved as a AP-rated generic product.
And we did that and now we're doing the same thing with generic Copaxone, another complex mixture product. It is not a biologic. It's made from amino acids, but is made in a chemical process. It's a synthetic polypeptide. And ANDA was filed on this product and application was accepted by the FDA in July of 2008. So we are coming up on six years. So we'll talk a little bit about the regulatory process here as well as the legal process that we're looking at right now.
So as I said, the ANDA is under review at the FDA. It certainly has become clear over the time that this ANDA has been filed that the patents projecting Copaxone, at least the bulk of the patents would be expiring in May 2014. So that's certainly part of the reason or a large part of the reason, why the review has taken this long.
But this is a complex product, where the mechanism of action is not well-known and well understood. But we certainly believe that we have submitted an ANDA that demonstrate to the FDA that we have a product that meets the same standard under a 505(j) pathway and we are very confident that we will have this ANDA approved, as an AP-rated, as a directly interchangeable generic product.
Teva has filed citizens' petitions, requesting the FDA not approve a generic Copaxone unless clinical studies are performed. More recently, Teva filed lawsuit against the FDA trying to preemptively prevent them from approving a product that attempts fails.
There are attempts that in injunction were rejected. And we believe that what will happen with these citizens' petitions is the same thing that happened with generic Lovenox that at the time of approval the FDA will issue a final CP response that explains and outlines their rationale for the approval.
As I said, Copaxone is protected by nine patents, which were litigated at the time we filed our four fillings. These patents were upheld in the district court, but a portion of the patents were invalidated upon appeal by the CAFC. And in particular, one of those patents that was invalidated as a patent that runs through September 2015.
Teva did appeal that to the Supreme Court, and the Supreme Court has picked up that case for review. So presently, we're in a situation where the Orange Book patents and eight of nine patents protecting Copaxone expire May 24, less than a week from now this year, and there is one trailing manufacturing process patent expire September 2015, while having been invalidated by the CAFC that is up for review by the Supreme Court.
So we are presently -- we and our partner Sandoz are presently reviewing our options for a launch prior to hearing from the Supreme Court as far as the resolutions this case. The expected timeline is that the case will be heard by the Supreme Court in October.
Decision could come down as early as December of 2014, but more likely in the first half of 2015. So between now and then, we have to be careful and be cognizant of the fact that this patent is in play and we are working with Sandoz to determine the best way to address this market.
So I'll move on to our biosimilar opportunity. We all know that biosimilars has a large opportunity and there are two advantages that we think we can obtain with biosimilars based on our approach. And one advantage is by doing more characterization that we can potentially reduce or eliminate the need for a Phase 3 clinical study. And then secondarily, we believe that we'll be in a better position than our competitors, to obtain interchangeability designation under the Biologics Act of interchangeability is provided for, and we believe we'll have a chance at that.
So here's an FDA slide that indicates that with greater analytical work and demonstrating that you have engineered your biosimilar product to fingerprint like similarity, and reduced differences and reducing individual risk, therefore that the additional clinical studies that you have to do beyond your PK/PD studies will be reduced and possibly eliminated, and we still believe that. And that is the approach that we are taking with the products that we are working on.
So we use expensive physicochemical characterization of our products to understand the process to replicate the branded product, and we also use confirmatory biological characterization in order to demonstrate to the FDA, again the fingerprint like similarity that our products have to the branded product.
So in most biologics there are portions of the molecule that are different portions that are unknown. We've worked to develop tools, methods, approaches that eliminate these unknown areas, and we have engineered out the differences between our product and the branded products that we are working on.
So again, FDA has indicated they are taking a totality of the evidence approach. So they are combining the structural work with the biological characterization with the preclinical work with PK/PD data, and we believe that we can use that package to obtain approval and that is our objective.
So our pipeline, we have two products that we are working on with Baxter in that collaboration, M923, we're targeting a regulatory filing by the end of this year and entering the clinic with PK/PD study early next year. M834 is the product in which we're targeting in the second half of this year to achieve an early proof-of-concept milestone.
Now, that proof-of-concept is essentially demonstrating that we've engineered the product M834 to a high degree of, again, fingerprint-like similarity with the branded product and has demonstrated that as a small scale. And then further, we'll be moving that forward into scale of that product. We are also working on M511. And that product is unpartnered right now. We're moving that product forward.
So moving on to our new drug portfolio, as I mentioned, we in the early days of the company, based on our work with Lovenox, we did a lot of work with heparins, in understanding heparins. And there's always been anecdotal information and some academic studies around using heparin in oncology that heparins have a very active biology and antimetastatic, antiproliferative characteristics.
But if we could somehow reduce the anticoagulation, that's the limit on increasing dose. And so what we have done is we have engineered a product M402, in which we have significantly substantially reduced the anticoagulating effects in order to substantially increase the dose and take advantage of the anti-cancer properties of heparin.
We're studying that product right now in pancreatic cancer within the Phase 1 study. It's Part A of a Phase 1/2 study. And we're using M402 in combination with the Abraxane and gemcitabine. We are expecting release data on this Part A dose-escalating phase of the study later this year. And then we'll move into Part B, which is the randomized control portion of the study. So again, this is very exciting product. We think it could be broadly applied across a range of cancers. So this is something that we think has a novel mechanism of action that could be widely applied.
Now, we've also extended our research programs into understanding IVIg product that is also a complex mixture, it's derived from plasma, and we in-licensed the technology around the sialylation of IVIg. And what we have discovered in our work on the sialylation, the sialylation boosts the potency and the anti-inflammatory activity of IVIg.
But in addition to working on plasma-derived IVIg, we're also trying to understand, what's in IVIg? What are different components of it? How could we get an understanding of that biological activity? So we've done a lot of physical, structural characterization of the product. Biocharacterization would actually define much of the mechanism of action of IVIg.
And what this has allowed us to do is to essentially deconstruct IVIg into component parts, so that we can come up with novel recombinant products based on IgG antibody or other Fc areas of antibodies. And again, with sialylating this Fc region of IVIg, we can get a substantially increased potency.
So this is a very exciting platform for us, exciting new area of research for us. And what we'd like to do at later this year, we'll be explaining more about where we are with this program in conjunction with releasing data on the oncology product, so a lot of interesting things happening with Momenta on the new drug side.
So as I go through these one-on-one meetings, there is very definitely a focus, it's not a hyper-focus on our generic Copaxone, and what's going to be happening with that approval and launch. We do want to emphasize that in addition to that we have a very robust and broad program in biosimilars as well as in new drug and in exciting new drug technology. So that really is the breadth of Momenta is the complex generic business, not only the generic Copaxone, the biosimilars and the novel drugs.
And just a bit on the finances. We closed Q1 with $224 million in cash. Our cash burn is projected to average approximately $28 million per quarter. That's excluding the milestones that we'll earn on the Baxter collaborations. But for 2014, the cash burn will be more in the range of approximately $90 million.
So again, in Momenta, we've taken an approach and a specialty in analysis of complex mixture of products. And now we're applying that not only to heparin-based products, as well as complex polypeptide, and now to Fc antibodies IVIg. And with that we've built a platform of products across the portfolio. So exciting times for us and something where we are increasingly moving to a more balanced company, balance between the generic side of the business and a novel side of the business.
So that is Momenta Pharmaceuticals. And I'd be happy take additional questions in the breakout. Thank you.
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