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Executives

Rick Shea - SVP and CFO

Ganesh Venkataraman - CSO, SVP, Research and Co-Founder

Analysts

Robyn Karnauskas - Deutsche Bank Securities

Momenta Pharmaceuticals, Inc. (MNTA) Deutsche Bank BioFEST December 5, 2011 9:00 AM ET

Robyn Karnauskas - Deutsche Bank Securities

Thank you all for joining us and for those of you on the webcast. I am Robyn Karnauskas. And next, we have Momenta Pharmaceuticals. And it’s my pleasure to introduce, not only Rick Shea, the CFO, but also Ganesh Venkataraman – did I say that correctly – which is the one of the founders and chief scientific officer of Momenta.

And actually for those of you who are listening on the webcast, if you want to email me any questions, robyn.karnauskas@db.com. So with Ganesh here, he could answer any questions around their acquisition this morning and around some of the science behind Momenta.

And for those of you in the audience, again, we’re trying to use the DB app to sort of get some real-time feedback on the conference.

So with that, we’ll start off talking about – talking about Lovenox, first of all. You guys have been very successful with defending your patents. Maybe talk a little bit about -- you've got several cases actually ongoing. Maybe just give everyone in the audience an update on when is the next data point for each of those court cases? When we’re going to hear.

Rick Shea

So as you know we have been – in response to Amphastar’s approval for generic Lovenox on September 19, we sued Amphastar and Watson under our patents and obtained initially a temporary restraining order and then a temporary injunction against Amphastar and Watson, preventing them from launching.

Amphastar and Watson have appealed both at the district court level on emergency basis as well as at the appellate level, both on emergency basis and on a protracted basis. And as of last Friday, the district court upheld the original temporary injunction, denied the motion by Amphastar.

So Amphastar’s avenues of ending the temporary injunction now lie with the appellate court. There are some briefs and documents that are to be filed at the appellate level during the month of December and into early January. So sometime following that, presumably that there will be some hearing at the appellate level and some determination by the appellate court of whether the temporary injunction will stay in place.

Robyn Karnauskas - Deutsche Bank Securities

And TIs are very hard to get and they are hard to overturn, do you have a statistic on what percentage of TIs that are overturned at the appellate court?

Rick Shea

I don’t have a statistic, and I find when applying general industry wide statistics to whatever is happening at Momenta is probably a bad analogy.

Robyn Karnauskas - Deutsche Bank Securities

Very fair. And then I get some questions sometimes about people thinking you can manufacture a drug ex-U.S. and import it. But it wouldn’t infringe International Trade Commission rules, you can file suit under ITC and keep that from happening, as well as you can’t leave away anywhere (ph).

Rick Shea

Yeah, you are referring to our similar lawsuits on the patents against Teva Pharmaceuticals, for their generic Lovenox. In their early response to that suit, they’ve indicated that they are manufacturing the drug offshore and that might possibly be a vehicle for defense for them. And I think you’re absolutely correct that using an infringing process to manufacture a product and then importing that into the United States, this is not allowed. And so their argument would have to be slightly different, a more subtle argument, than simply the fact that it’s manufactured offshore.

Robyn Karnauskas - Deutsche Bank Securities

If that would happen, would you have to go through a separate court through the ITC to sort of – because there is better rules against that, via ITC court case versus the U.S. court?

Rick Shea

My understanding is that we can use the court process for that.

Robyn Karnauskas - Deutsche Bank Securities

Okay. And then third on the sanofi – the case against sanofi, maybe remind the audience what the case is versus the sanofi. And they recently made a decision to remove their authorized generic, I think that was last week. Maybe talk a little bit about what’s the status on the court case, first of all and then –

Rick Shea

Well, the court case with sanofi is not versus Momenta. Sanofi sued the FDA on the basis that the FDA’s approval – rejection of their citizens' petition and approving their generic Lovenox. So we are not a party to that case. My understanding is that, just following the normal course of litigation, which in this country, once their request for a preliminary injunction was denied, can easily take a couple of years or so. And I don’t see anything that is happening to make that move more quickly.

Of course, in response to Amphastar’s approval and their announcement – Watson’s announcement that they were going to launch in the fourth quarter, sanofi, through their subsidiary, Sanofi Winthrop, did launch an authorized generic. You can see in the court papers that were filed in the Amphastar case that there are declarations from Sandoz regarding that launch and what Winthrop has been doing. So Winthrop went after several of Sandoz’s customers, it was clear that they secured at least one of those customers. And in response, Sandoz had to make some price reductions to some of their retail customers.

But now more recently last week, sanofi announced that they were withdrawing the authorized generic. They did say that they would ‘work’ with customers and honor contractual commitments. So what we view that as is that they certainly will not be going after new customers and with respect to any existing relationships that they have in place. It’s probably up to a discussion between them and the customer whether they need to continue to supply or whether the customer’s just going to revert back to their arrangements with Sandoz.

Robyn Karnauskas - Deutsche Bank Securities

So what effect did this have on pricing? They came in at a low price only a few customers, but what effect did this have on pricing and can pricing recover? Are they – is it in effect each time you have a competitor enter into the market, it lowers price point?

Rick Shea

Well, we’re not at liberty to discuss the pricing in any detail. Sandoz handles that, and they tend to be closed-mouthed about any pricing – with respect to specific customers. But certainly there was some pricing discounts involved in the customers, the question that were approached by Winthrop.

As far as pricing being restored, it probably would be after the contractual commitments are fulfilled. So it would not be an immediate reversion on price. So any change in price back to where it was before the Winthrop launch, would probably take some time. But again, as you indicated it was limited to only a few customers.

Robyn Karnauskas - Deutsche Bank Securities

Okay. Great. Are there any questions regarding generic Lovenox from the audience (indiscernible) before we move on. I actually have a question. All right. Here is a question from an anonymous investor. Teva has some different arguments versus Amphastar and Lovenox, i.e. that they -- okay, manufacture ex-US. Okay, you answered that, right?

All right. Moving on to generic Copaxone, so I am going to ask this, you probably won’t answer. Maybe you can talk about this. What is the advantage of settling a court case when a patent expires in 2014, 2015? So is there any advantage of settling a court case ahead of – and for those of you listening there is a debate between Copaxone and Momenta right now. There is a litigation ongoing.

Rick Shea

The file was completed in December, we’re waiting the district court decision.

Robyn Karnauskas - Deutsche Bank Securities

So if the district court decision is not in your favor, I think you’ll go to the appellate court and continue to litigate this. I assume that there is no incentive of settling, no? I think. I would assume or is there any –

Rick Shea

Well, I guess, my view on speculative considerations regarding a potential settlement, I mean, anyone can speculate as well as I can. And so I think the economics on either side are pretty clear. So I don’t know if it’s going to be worthwhile for me to add my view on that kind of speculation. It’s – now as you say it, there is a little bit of a different case. If you’re in a situation where you have a patent that goes out to 2024, something – there is certainly different motivations than there is with patents that run to 2014, 2015. So…

Robyn Karnauskas - Deutsche Bank Securities

The FDA did wait for the decision on Lovenox in the court to be decided. They did that – at least the timing of the FDA decision for enoxaparin occurred after the court case outcome and actually several appeals. Do you think that the FDA will stay if you lose this case and the patents are upheld, that will have any effect on the timing of an FDA decision on Copaxone?

Rick Shea

I don’t believe the FDA at this point is tracking their progress versus what’s happening in the court. And I think at this point the process is moving forward with the time table that’s dictated by the FDA and their own time table and I don’t think they (inaudible). So it could be sooner, could be later, and I think it’s going to follow its own path with the FDA.

Robyn Karnauskas - Deutsche Bank Securities

Okay. And then I get a lot of questions trying to understand the difference in the characterization and getting into the science -- characterization of Copaxone, how that differs from characterization of complex sugar. And to me, one is lot about chemistry and heat exchange, and I thought maybe it would be good for – since Ganesh is here, to describe a little bit more in depth. And to me, they are different things but maybe I may even – how hard do you think it is to characterize Copaxone versus how difficult is it to characterize complex sugars like Lovenox? And what difference skill sets that will require?

Ganesh Venkataraman

Sure. I guess, at the core of that they are both very similar and that they are both characterized by overall molecular weight and they are very complex mixtures. There are some differences. But there are lot of things that, in terms of how Momenta approaches the problem, the core technology, integrating diverse data sets et cetera, all of that is directly applicable. And so that’s where it’s a logical extension of our enoxaparin program. The actual methods compared to what you use for sugars versus what you use for peptides (indiscernible) the analytical methods, or in some sense, EBL (ph) one could say because these are peptides as against sugars but in some sense because the complexity is more.

So at the core of it, I would say it’s a wash in terms of some more complex but some more established technologies that can be brought to bear. In terms of the process itself they are different. I don’t know if I will call it as easier or more challenging. Enoxaparin, as you know, is derived from animal origin from pig intestinal mucosal heparin. And so that presents a whole set of challenges in terms of how you control the toning (ph) material and in terms of manufacturing supply chain.

With Copaxone, it’s a synthetic chemistry. So it’s much – that is well studied and this kind of takes rules that govern how they form a polymer. So in some sense, it’s easy but that’s one, in some axis, they are easier; in some axis they are more difficult. So I would say in some – it’s a different problem but it’s very amenable to how Enoxaparin was solved.

Robyn Karnauskas - Deutsche Bank Securities

Okay. And if you are the FDA, so say, you reverse engineer, you figure out by reverse engineering how Copaxone is made. If you’re the FDA and you have two protocols that are very similar, but there is really no – I mean, you just looking at – just by your due diligence or by your work that maybe you reverse engineer the product correctly, how do you think the FDA views an application like that? Do you think they still have to debate whether or not you proved sameness and bioequivalence if the procedures are relatively similar?

Ganesh Venkataraman

Again I can’t speak for FDA but I would say that the criteria here is that the FDA needs to be convinced that we have the same molecule. And I think the combination of the analytics, the combination of the process conditions and all the biological data that we supply to them on a head to head basis is what they’re going to use for demonstrating their equivalence.

So I think I believe that the science is there. I think we have a very strong patent in front of them but we’ll have to wait and see till the final answer comes.

Robyn Karnauskas - Deutsche Bank Securities

As far as, we’re always hearing a debate, Lovenox test (ph) activity but with Copaxone, there is no test, maybe there is a belief, there is no test to show bioequivalence. You guys have always mentioned that you might be developing or thinking ways to prove to the FDA bioequivalence. When will the public hear about those? Will we ever, or it won’t be until we see a decision from FDA?

Rick Shea

It won’t be until you see a decision from the FDA.

Robyn Karnauskas - Deutsche Bank Securities

Now it would be a good time I think. Okay. That’s helpful. And maybe a little bit more discussion about how your discussions are going. Have your discussions changed? Have the people you – since the discussion with the FDA has been going on for a while now, are you still working with the same people?

Rick Shea

Yes, we’re still working with the same people. We t6have a very regular and productive discussion with the FDA. So things are moving. But the FDA is being very rigorous and very thorough in their review.

Robyn Karnauskas - Deutsche Bank Securities

Okay. Are there any questions generic Copaxone for an issue? I guess, first question on follow-on biologics. You guys have been talking about a partnership for a while. And so the first question is why are you taking so long? I know you – why is it taking so long to reach a partnership? Is it much later than you had expected? What’s the hurdle for convincing a partner to partner with you?

Rick Shea

I think the key as we have said in an FOB partnership is that we’re completely aligned on a strategy of follow-on biologics. And the Momenta strategy, which we think is different than any of our competitors is to explicitly design a product to be interchangeable. Under the FOB legislation and the FDA guidelines, interchangeability is provided for. And we believe that by focusing on making a product that will ultimately achieve interchangeability, we can gain in a couple of areas – one area would be, if we can demonstrate that our product is, if not, equivalent to the branded product -- substantially equivalent to the product, potentially more equivalent to the branded product than our competitors, we could potentially reduce the time and size and scope of clinical studies required by the FDA. And FDA has explicitly said that in their New England Journal article.

They describe these type 1, type 2, type 3 meetings. The type 1 meeting is to look at the product and understand the differences between your product and a branded product. And we believe that if your product is demonstrated to be highly equivalent to the branded product, that you have a good argument with the FDA that you have a different type of a clinical program than just doing what seems to be the European approach of kind of a full phase one, phase three and somehow change that approach to your clinical studies that would reduce costs and shorten the duration of the clinical study.

And then secondarily, once you get on the market, we believe that if the product that’s the first interchangeable product is the product that’s going to be the breakthrough product. It’s not going to be the first biosimilar approved. It’s going to be the first interchangeable approved.

Unidentified Analyst

What products are you thinking clearly fall into that type 1 category? Just rattle off a few that are in common parlance today that you think clearly kind of meet that standard.

Rick Shea

Well, we’ve said that our technology can be applied to glycosylated proteins and antibodies. And I think anybody in this room could probably list the top 10 or 12 products whose patents are expiring over the next three to eight years. And those are the products that we’re looking at the same way that other people are looking at those products. So many, if not, most of those products, we think, are amenable to the Momenta approach.

Robyn Karnauskas - Deutsche Bank Securities

That’s the case. So going back to the original question, do you need to have your partner aligned with your perception, is a partner –partners having hard time believing there will be interchangeability? What is the sticking point?

Rick Shea

I think there is a lot of skepticism about what Momenta does and on two fronts – one, skepticism is on the technical front. Can it be done? The second is, does it matter? So you must be able to do it. But is the FDA going to give you credit for it? So that was the discussion about Lovenox. Within a week of our getting generic Lovenox approved, we still had observers and investors saying that we needed to do clinical studies, because that’s what they required in Europe.

And that’s not what happened. And we believe that same thing is going to happen with generic Copaxone. We think that’s the direction that the FDA is setting with biologics. And if you read what they are saying in New England Journal or any other public comments made by senior FDA officials regarding biologics and biosimilars, this is clearly the direction that they are going now.

Robyn Karnauskas - Deutsche Bank Securities

So when you see the first biosimilar pathway announced by the FDA, do you think within it there will be a specific requirement for interchangeability on – or –

Rick Shea

The requirement I think it’s a possibility. It’s a pathway to interchangeability.

Robyn Karnauskas - Deutsche Bank Securities

But will they lay out the requirements for interchangeability versus non-interchangeability? Will they separate the two just given what Europe has done, sort of general guideline and sort of what people figure out? Let them leave open the possibility of interchangeability but not give specific criteria.

Rick Shea

Okay. Our view is that it’s going to be general guideline, it’s going to be, on the one hand, that’s on the other hand, that they’re going to talk, I think, about the interplay between product analysis, product characterization and the clinical work that’s done. You want to add any comments, Ganesh?

Ganesh Venkataraman

No, I think that it’s going to be general guideline is what we think it is.

Robyn Karnauskas - Deutsche Bank Securities

So what gets a partner over the hump though? So what’s going to be out there to give people a little bit more comfort? Because if I think I am – I’m just pretending to be a fake company. If I am a fake company and I want a drug to do -- create a biosimilar, I could come to you to create at least a starting cell line that might be more similar to someone else's product or cell line. And that would at least give me, maybe lower the bars just a little bit of potentially reaching interchangeability. So at least you have a better (indiscernible) what is really keeping these partners back?

Rick Shea

It’s not a question of keeping the partners back. I mean, in any platform partnering discussions that any company ever has, there is a balance between how far along you are, what kind of value you’ve created and how they can play into getting the best possible economics for the technology. So that’s the interplay.

So what you’re trying to do is you’re trying to find a partner that’s willing to make a significant and major commitments to the business. That’s one. They believe in the technology. They believe in your strategic approach, the regulatory approach, your litigation approach, your IP approach. They believe in all of that. And lastly, they are willing to give you commensurate value in the deal. So those are the things that you will look for in a partnership.

Robyn Karnauskas - Deutsche Bank Securities

Helpful.

Unidentified Analyst

And Richard, are you trying to get kind of a comprehensive partner? You don’t (inaudible)

Rick Shea

It should be broad in scope. It’s not necessarily covering the entire FOB landscape, but significant enough, so that within the deals, you want to be able to develop economies of scale and approach.

Unidentified Analyst

I think all of us appreciate how difficult it is to consummate a deal, and making projections about timing is kind of fraught with risk. But given that time is of the essence and we are kind of marching on and you’re talking about patents that are not so far away – certainly as it relates to clinical development timelines, is 2012 – is that a reasonable expectation for the market to see a deal in this regard for Momenta?

Rick Shea

I think for us, we agree entirely with what you’re saying. And for us, sooner is better than later. We’re certainly motivated to get something done in more of a near-term timeframe as you’re describing.

Unidentified Analyst

And so when you see something kind of this large scale multi-national companies doing for U.S., doing clinical trials, what’s your interpretation of that as it relates to your comment about interchangeability? This is the direction that the FDA is going. Would you just say that they’re just taking an ultra-conservative approach when they are wanting to do clinical work for ultimate approval for the U.S. market?

Rick Shea

I would say so, and I would say, they’re viewing the market as being a market of biosimilars where the scope of their clinical work, or the scope of their sales and marketing effort is what’s going to get them a differentiated market share. And we don’t see it that way. We see that interchangeability is what gives you differentiated market share.

Robyn Karnauskas - Deutsche Bank Securities

Last question. Yes, maybe you could talk about your acquisition and what the purpose of that technology is as far as like adding value to your ability to create biosimilars?

Ganesh Venkataraman

Sure. Again, as you know, we have been assembling a lot of different kind of tools and technologies towards characterization of biologicals as well as engineering of biologicals, especially products like monoclonals, like Rick referred to. And part of that toolkit also focuses on our ability to look at how complex sugars that are on these biological products can actually regulate activities.

So this acquisition of the asset from Virdante is actually around the technology that augments our internal capabilities to really unleash some novel biologies that these sugars can. And I think in a nutshell, this is based on a technology that Dr. Ravetch at Rockefeller found about three years ago about how a certain kind of sugar modification create an anti-inflammatory property to saddle up the monoclonal antibodies. And especially, IVIG is something that he worked on and focused on. And I think the core technology enables us to take that, what’s called sialic acid switch technology and apply it very broadly to a variety of products so that you can unleash some anti-inflammatory properties for those products.

So it’s a very powerful tool that you can add to the toolkit to start to engineer these kind of products, especially as you think about biobetters, taking existing products and starting to engineer in novel biologies and novel clinical end points into them so that you get a very much enhanced product out of it. So that’s – we’re very excited about applying it to those kinds of products.

Rick Shea

So just to be clear, this is for novel drugs, not biosimilars.

Robyn Karnauskas - Deutsche Bank Securities

Got it. Okay. All right. Thank you very much.

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