Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA)
Wells Fargo Securities Health Care Conference
September 7, 2016 01:45 PM ET
Rick Shea - CFO and SVP
Unidentified Company Representative
Today, it's my pleasure to introduce the management team from Momenta; Rick Shea is the Company's Chief Financial Officer and Senior Vice President. He has been with the company since 2003. We’ve known Momenta probably since 2003 or so, we’ve had been as many of you have seen at our popular GPhA conferences and different biosimilar forums. We’re very interested in biosimilars, we’re very interested in Momenta and without any further adieu I’m going to turn it over to Rick to tell us about the Company's pipeline and current progress. Thank you.
Thank you very much David and thanks to Wells Fargo. Before commencing this presentation, I would draw your attention to our Safe Harbor statement and the risk factors included in our SEC filings. Momenta Pharmaceuticals began its operations in 2001 and IPOed in 2004. We started life as a company that was going to be balanced between generic drugs and novel drugs and we came into being from MIT with expertise in high resolution analytics and working with complex mixtures, complex mixture drugs understanding, analyzing and characterizing those products in order to develop generic versions or biosimilar versions or novel versions of drugs. So, complex generics, we have on the market generic LOVENOX and generic COPAXONE, we’ll talk a little bit more about that. And the biosimilars, when we speak to that initially and our approach to biosimilars was really a belief in this market was that it’s necessary to build a broad and deep portfolio highly uncertain are where it is important to have a portfolio to spread the expertise, regulatory learnings, the scientific learnings from working with these fusion proteins and antibodies and at the same time give ourselves the greatest opportunity for success.
We have a broad portfolio right now; we’ve got a lead program in a biosimilar HUMIRA that have partnered with Baxalta presently taken over Shire. And we have a fixed product collaboration with Mylan, a lead product and that collaboration as a biosimilar ORENCIA. So we are looking to gain a differentiation, an advantage through our structural characterization abilities and we're trying to take an approach where we engineer products as close to brand as possible, highly similar as possible and through that we hope to gain extrapolation of indications potentially interchangeability, possibly down the line a reduction of human patient clinical study and gaining [indiscernible] for these biosimilar products. And finally, the commercial side of this program is, we're looking to go global. We have used and are using global partners, Baxalta, and now Shire for the lead program, and now Mylan who has broad capabilities in this area for commercialization.
So a little bit on the Mylan collaboration, six product collaboration, lead product is the biosimilar ORENCIA. It’s a 50-50 cost share and profit share. So, Mylan paid us $345 million upfront first quarter of this year and Mylan is funding its 50% share of the collaboration over the next couple of years though milestone payments to $200 million in milestone payment and we are projecting to receive about $60 million of that contingent milestone payments this year. But again this is really 50-50 cost share, profit share, so fundamentally the costs are shared and the profits will be shared. A little bit on biosimilar ORENCIA, we're not seeing much competition for this particular product, we see a significant opportunity here, this was a highly complex product, complex API and complex formulation. So we see a distinct advantage here, so rather than some of the biosimilar products that look to have very crowded competition ORENCIA looks like at this time anyway, we’re in a pretty good competitive position on this product. We did file an IPR on one BMS patent 239; instituted and based on PTAB timeline we expect a decision on that IPR in January of 2017.
So our M923 is biosimilar HUMIRA, we partnered this will Baxalta, now Shire, and that program is advanced, we’re in clinic right now, we’ve completed enrollment and expect to finish the trial towards the end of the year and have data in the first half of next year. So we’re certainly in line with competitors in terms of the timetable for FDA filing and the regulatory side of things on that product. Our PK study had very strong results, very close to brand and that was as expected, again with that technology we believe we can engineer programs that are highly similar, very similar to the brand. I want to talk a little bit on complex generics on Glatopa. So Glatopa 20 mg daily injectable Glatopa was approved by FDA in April of last year, we launched in June of last year. Right now Sandoz, with whom we partnered this product, is saying that the market share is about 38% of the daily injectable 20 mg market for COPAXONE. We reported just under $21 million in profit share in the second quarter of this year for that product.
We are moving forward on a 40 mg version, ANDA has been filed on regulatory front; the ANDA is under review by the FDA. We are hopeful to get ANDA approval this year, released FDA as indicated that they are looking to prove these ANDAs within the timeline of regulatory exclusivity or 30 month stay, regulatory exclusivity on the 40 mg program expires at the end of January ‘17 and the 30 month stay expires in February 2017. So if not by the end of the year, certainly very early next year we expect FDA approval. On the legal front, patent office, IPR decisions, we had decisions on three of the five outstanding patents, method of used patents on this two times weekly. They were favorable, these are IPRs instituted by Mylan, they were favorable, they invalidated the patent based on [indiscernible]. We though the rulings were very well written and very well thought out and we see them as being indicative of how we think the District Court trial will go. That trial date is September 26 and it will be presented before patents included within that case. We are anticipating a ruling from that District Court case in the first quarter of ’17.
And just want to point out that with respect to competition nobody else, no other ANDAs have been approved for the 20 mg formulation and the API on the 40 mg is the same as the 20 mg, so again we don't expect any obstacles in getting our ANDA approved. And we have yet to see any competitors; ANDA is approved so that puts us in a pretty good position as we head into 2017. I did want to talk a little bit on the novel drug front, we previously had necuparanib which was a heparin-based oncology drug candidate that we were testing in pancreatic cancer as we announced at the end of July that we stopped enrolment in that phase 2 study based on a planned interim futility analysis, we subsequently reviewed that data and based on that review have determined that we should discontinue that program, so we would no longer be continuing the development of necuparanib. That is a product and the technology that comes with the earliest technology the company from MIC the heparin-based expertise, I think that was an area that that there was a lot of interest in whether heparins could be shown to create improved outcomes for patients in oncology, so in this particular setting in pancreatic we did not show sufficient improvement over what the patients are seeing from Abraxane, so we have discontinued that product.
We are moving forward with a novel drug pipeline which is directed towards autoimmune indications. So couple of years ago we picked up some technology for sialylation of IVIG, we've done a lot of work in understanding IVIG, the mechanisms, the receptors that it hits. And certainly in addition to the product opportunity with that technology which was the sialylation technology, we’re also looking at possibilities to create recombinant products that would address the same indication. So I will say that the hyper-sialylated product is a viable product candidate. We are continuing to pursue that; we will be likely talking to IVIG companies about partnering that product. We have made notable progress on that program in our research group. But in addition, we have come up with two additional recombinant products and that would be addressing many of these indications that are addressed by IVIG. M281 is an anti-FcRn and this is a product addressing rapid clearance of IgG and it has a potential to be used acutely or intermittently, and significant for the company. That product has moved into clinic and we've initiated a phase 1 study for M281.
We have a plan to report the data from that phase 1 study in the second half of 2017. Another product that we have in development M230 is also based on Fc technology, it’s Fc trimer and it replicates the efficacy of IVIG at lower doses in preclinical studies. So here is a product that’s a recombinant product that could be targeted to many of the indications that IVIG has targeted to but without the issues around plasma collection and also IV infusion at high doses. So, we have engineered a high producing GMP manufacturing cell line and we are targeting for that product to go into the clinic in the first half of 2017. So just an overview on second quarter. As I said, the product revenue which is Glatopa revenues just under $21 million of profit share revenues on Glatopa. And total operating expenses, we’ve given guidance that the operating expenses on a cash basis, on non-GAAP basis would be about $40 million to $45 million, so net of the current run rate on the Glatopa revenues that would mean a cash burn in the $20 million to $25 million per quarter range.
Obviously, we ended the second quarter $350 million in cash, so we have a good sort of cash and obviously with the 40 mg opportunity coming up in the first quarter of ’17, [indiscernible] good shape to fund our pipeline. So, we will be continuing to move forward on development of full product pipeline with 923 again completing its patient trial towards the end of this year and data first half of next year. Moving the biosimilar ORENCIA into the clinic and moving forward with our product candidate in the autoimmune indications as well. So, our goals again to move forward on all three product fronts with biosimilar ORENCIA move forward on clearing the way for a launch a 40 mg Glatopa is really is Q1 of next year. And then moving forward, our development candidates for autoimmune indications further into the clinic. And, we look forward and see what kind of a company we could be in 2020 timeframe. We certainly could be launching one to two biosimilar products on an annual basis continuing to see revenues from Glatopa as well as launching products into this immunology space on a novel drug front. So that is the future of the company and we think it’s an exciting future, it’s one that presents certainly at this time a significant investment opportunity, so we welcome your interest.
So at this point, I could take questions if you an…
Unidentified Company Representative
So first on the Mylan partnership, one of things that Craig and I spoke about the last time we got together was that he - this is getting the highest level of attention at Mylan and then a lot of [indiscernible] directing quite a bit with Heather and working out some of the details of what the plan will be. Given the recent news, does this slowdown the integration process or is that completely separate? And then maybe if you could also talk about both the undisclosed programs, when will we hear about them like when - are there any triggers to learn what the undisclosed programs are? And on the manufacturing side, what have you thought about like what's the plan for manufacturing?
Okay so, taking those sequence, so I’ll talk first about the EpiPen situation at Mylan is dealing with, I think that’s an issue that certainly isn't just a Mylan issue, it’s an industry wide issue and certainly there are a lot of products in other areas that potentially have similar issues here. I don't think that affects our biosimilars collaboration at all, certainly not at the operating level, we continue to work very closely with the operating team at Mylan and moving forward with our development plan. And if anything having a broad portfolio of biosimilar products would bolster the case for both Mylan and Momenta being at the cutting edge of saving the healthcare system significant amount of money over the next period of time. So, I don't see that as an issue at all between us and Mylan and for the effective operation of that collaboration.
Now with respect to products and when we will hear or when we will disclose, what are the products next in line behind the biosimilar ORENCIA, generally we disclosed the specific programs when they hit the clinic or just an advance of the products hitting the clinic, so as that occurs we will be disclosing those products. And finally, the final question had to do with the manufacturing strategy and that is something we’re actively discussing with Mylan, I mean, we have had in place contract manufacturers for purposes of making clinical supplies for the development program. So the real question here is where we - how we’re going to set up a supply chain for the commercial supplier these biologic products. And you know this is something that that we have a little bit of time to work out, depends a lot on what kind of scale is needed for the products, what kind of dosing requirements and what kind of scale of quantities would be required for the product but broadly speaking, I know that Mylan was interested in putting a supply chain in an advantageous area whether it's on cost advantage or tax advantage that’s something we'll be actively discussing with Mylan.
Unidentified Company Representative
Does that cost come out of your percentage or their percentage or do you share that? For example, if you were to build the facility or to partner with [indiscernible] someone to come up with manufacturing?
So if it’s contract manufacturing then it just comes to cost of sales and we share in that cost, if Mylan makes a decision to build in-house, they would bear the cost of that investment, but they could recapture through the usage of the facility.
Unidentified Company Representative
Alright thank you. The speaker right before you from Teva gave a timeline for the 40 milligram that they really didn't expect competition next year and you gave a lot of caveats that they are uncertain and they don't have visibility, but based on appeals and legal decisions and timing and not having a challenge on the fourth patent that they would expect not to have any competition next year? Do you have any thoughts on first launching at risk and the appetite for doing that, the second is, is that timeline sort of [indiscernible] with your timeline and you mentioned you expect to get an approval by the end of this year or early next year but from a launch timeframe?
So if you're looking at litigation timelines and appeal timelines and exhausting all appeals in those timelines, I think everybody makes the same projections. So I don't think there is any difference of opinion as to how long it takes from a District Court opinion to CAFC decision or to any other type of an appeal. So it really has more to, you know, whether there is a launch in 2017 or 2018 as more to do with the willingness to launch at risk and I think, we have been consistent in saying it depends on the outcome of the litigation and if we see a very strong ruling by the district court that we believe is likely to hold up on appeal and certainly if that follows in the heels or because that follows in the heels of a very strong IPR decision on these same patents, I think Sandoz and Novartis are going to be highly motivated to go ahead and launch at a risk and I certainly - in any discussions that we’ve had with them, they certainly have not ruled out a launch at risk and it will be dependent on the strength of the ruling.
Unidentified Company Representative
Additional questions? Okay. I want to thank you very much for your time and thank you everyone for your attention.
Thank you David.
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