Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA)
Credit Suisse 2014 Healthcare Conference Call
November 12, 2014 1:30 PM ET
Craig Wheeler – President and Chief Executive Officer
Thank you so much for coming to our healthcare conference. My name is Anna-Marie Shedroff [ph] I'm an associate on Ravi Mehrotra’s team. It is my great pleasure to introduce Craig Wheeler today from Momenta. Please go ahead.
Thanks. Thanks very much. It’s – I’m on here. So I'm going to go through the presentation. I would – if anybody has any questions as we go through here, I would – I'm happy to stop in between, we’ll have the questions at the end, as well as in the break-out session, so we can do it anyway people would like here. I just want to express that flexibility to you as I start here.
So I'm going to start with the traditional forward-looking statements here, of course, that we will be making forward-looking statements here and have no obligation to update, and I think the rest of the boilerplate, you are probably pretty familiar with at this point.
So I would like to start the talk here. We’ve just given you a bit of context on around who we are as a corporation. So Momenta, for those of you who have followed the company, has been around since about 2002. And we were really built on an analytics technical platform, an analytic platform that came out of MIT, Bob Langer’s lab at MIT, which was really around being able to look much more deeply into complex biologic mixtures. And that’s how most molecule – natural molecules in our body are. They’re never one structure. They’re as a combination of structures. But to be able to look at them, to be able to understand truly what their structures are, to be able to better structure activity work, and that was really the foundation of our company.
Since then, we've added on using similar principles our process development and our bio-analytic capabilities. Those capabilities actually led to three different business areas and we’re actually quite a small company to have the three business area which makes this story a little bit complex, but I think as you see as I go through this presentation, they actually fit together quite elegantly through the technology platform that we built, and those are complex generics.
Those are those molecules that are proved as NDAs originally, therefore the ANDA pathway is available, but they are complex molecules, things like Lovenox and Copaxone which are additional molecules, biosimilars and then novel drugs, and so we’ll talk about all three of them today.
On the bottom here is just some of the aspects about the company that you may know. Breakthrough success obviously in 2010 with our generic Lovenox approval, which we were quite fortunate that we had good approval with that and they actually gave us about $350 million to $400 million of profit in about 18 months, so it was a very successful generic launch for us. We have revenue generating collaborations with Sandoz on the complex generic side and Baxter on the biosimilar side, as well as a strong cash position of $176 million with last quarter.
Let me spend just a few moments on this slide before I go into products, just to give you a bit more context about the technology that we have and how they actually lead the portfolio that we've been able to develop.
So the physicochemical which was the core of the company, which was really the core behind what get enoxaparin approved is really using analytics in a different way. We are not using different analytics, right, we’re using mass specs and NMRs and capillary electrophoresis and your classic tools, modern day biology in analytics. But just the way the MIT team that founded the company and our company has been able to continue how you use these to basically give you an overall picture of the mixtures.
We don’t separate the components. We actually look at a whole mixture analysis and here is what we call [indiscernible] analytics are different pictures to look at molecules in the same way.
We are not going to dig deeper into the technical. What that does is it allows us to get a picture of these complex molecules that tells us you every structure that’s in them, full mass balance we call it. And that is a really good place to start if you are going to do structure activity work or duplication work and that was really about the original special sauce of the company.
We extended that into what we call our process tools or our controls on manufacturing. If you can understand these structures that’s one thing, but you have to understand how to make these structures. And we never in industry thought that deeply about how to control these subtle structures, because a new drug you just kind of make that and then you can actually do your clinical trial. But on the generic side particularly you have to control these processes very specifically.
So that whole platform is designed around a what – a design of experiment in using tools of our analytic powerhouse of applied to manufacturing. So think of it as, we have a manufacturing process and you’re putting a lot of fine-tuning control knobs, because we have to do that to be able to duplicate these complex molecules.
We've extended that piece of our business all the way from the heparin molecules and then synthetic molecules Copaxone to actual control of cell lines making drug. And I’ll talk a bit more about that in the biosimilar side.
Finally, biologic characterization, which is the same concept to find the biologic assays to be able to understand how biology is working therefore reduce our risk from the new drug side and reduce our residual uncertainty on the generic side. And that’s what really led to these businesses below which I’ve described are ANDA generics or biosimilars in our novel drugs.
I will start out with the question everybody is asking me first is the Copaxone. Lot of words on the slide, but basically that Copaxone is synthetic drug. It’s a complex polypeptide mixture that is generating a large amount of sales and is an established lead product in the MS marketplace with a pretty strong ability to price a generic, because it’s been very strong price increases over the past years.
We have a very strong partnership on this as well with Sandoz. Sandoz is probably one of the best physicians in this marketplace, with not only their own capabilities, but the world of Novartis MS capabilities behind them. They know this marketplace.
And for us this is a 50-50 partnership, so it’s good economically. It’s different for those of you who knew the Enox partnership we had, where we had stepped down based on different market conditions. We are 50-50 profit share partners in this all the way in perpetuity everywhere. Where we are now? I have – for those of you who have followed the company I have been expressing quite a positive bias lately in terms of my belief, in terms of approval time. I still am holding our hope that we see it at the end of this year, but I'm certainly seeing it’s certainly possible between the end of this year and the first quarter of next year.
The reason I say that is we have no outstanding questions with the FDA and we know they’ve been through elastics of our application, more questions could come, but we feel we are in the place right now where we are in the end game of that approval. Of course, this is a complex approval, where there is not just our application but there’s also the CPs that Teva has filed, et cetera, so that makes the timing of the actual approval uncertain but we feel pretty good about where our application is and that we’ve given everything they need to approve this product in the near future.
On the Court side, we’re still resting in the court. We’re waiting – we had our Supreme Court hearing on October 15, on our patent case with Teva. That Supreme Court ruling could come out anytime between December and I would say the first quarter of next year. It will be a more typical timing for this. And that will give us clarity in terms of what the legal risks are around launch et cetera. But we’re actually quite optimistic that this approval will be coming soon.
Now, I want to spend just a moment, talking about how this product means to us, because we’re getting lot of questions lately around, we seem to be de-emphasizing Copaxone. We are certainly giving it less time because we have a lot in our portfolio to talk about. But this product is really important to us in the future. And we actually see though there has been good – a lot of penetration and they made really good in roads into the market with the fretamsylic [ph] launch at Teva.
There’s still a pretty good market behind us. There are no therapies in the MS market and having no therapies, that mean, there’s incredible pressure to bring a generic, you know there’s no generic therapy. So all brand therapies are very high priced. They’re priced up to $55,000 to $60,000 a year per patient. And it’s really the only category that has no generic competition. So we feel there’s a lot of pressure out there to bring a generic into this marketplace. That should allow us to be able to compete effectively in the 20 milligram market. It should allow us to actually begin to retake for the generic product, the new patient starts.
And for the more aggressive plan, then they actually give us an opportunity to actually get a step at it, which would mean, this will be the first therapy use versus other therapies as well. So we’re anxious to get this into the marketplace so we can begin to take advantage of those diagnostics.
I’ll also point out that we have fretamsylic formulation that’s filed and so share that switching. We intend to go after that aggressively both with the FDA and challenging the patent. So we can get that into the marketplace and if we’re successful that market is possibly available to us in the first quarter of 2017.
I will note there is no difference between the API and the 40 milligram and 20 milligrams so all of this approval, debate we’re having about the call of the API will not be an issue for the fretamsylic product.
On biosimilars, biosimilars is a natural progression for us, but we stepped back and said what do we need to do to be successful here. It’s not just our – use our analytic tools to try to get a molecule for, we needed to be strategic about this business. So first, we said it’s essential for us as a company to have a broad portfolio and you’ve seen us starting to show you more and more about that portfolio it’s building, because this is marketplace where it’s going to be paid with contracting and having that portfolio, knowing which product will win, and how that revenues will smooth out. This gives us that opportunity. So we’re playing with the portfolio.
We also feel we can really use our technology here to gain competitive advantage and that comes both on the regulatory spending, as well as on the commercial spending, so things like reduced clinical trials, things like extrapolation across syndication and ultimately interchangeability designations from the FDA.
So that’s our goal to be able to use all of that to not only get those advantages on the regulatory setting but also the commercial setting and enable us to get these products to market quickly so we are always launching among the first generics or our biosimilars coming into any particular product.
The third and this is an important one is we view this business as ultimately in the long run going to be much more like a traditional generic business. Probably somewhat higher margins but still a generics’ business, which means how do you maximize value in that, you have to be able to play globally and you have to have low cost manufacturing and so we look to partners that are actually are aligned with that to actually build that long term vision for the business. Baxter is a great example of that partnership.
We revealed this portfolio at our R&D day about a month ago and the product we announced that – our top product, which is Humira, which is going into the clinic now. We have a second program, the blue ones are partnered with Baxter at this point, which is another autoimmunic inflammatory product which we haven’t talked about. And then we have a series of six other programs which we announced.
The way to think about this is we spent the time over the last two years, not just developing Humira, but actually developing an engine, a high throughput engine that we can bring the programs into.
Now that that engine is in place we’re going to fill it continuously and that’s what this – we call it our boatman [ph] internally with the portfolio of products are. You’ll notice also that we’re expanding our technology into NSO and SP2 products.
It’s very relevant to look back at the history with enoxaparin when you’re thinking about biosimilars with Momenta. And I put these quotes up here. The issue that the FDA has wrestled with is what kind of standards that they’re going to put in place to allow approval of these products, these complex mixture products. And obviously there’s been lobbying on all sides of this, on the generic side, on the brand side et cetera.
Where the FDA settled was to actually think about the paradigm that they used for enoxaparin, where deep characterization enables them to look beyond clinical trials to more accurate methods of looking a comparison and these are some quotes that you see from Janet Wilcoc [ph] and other up here where they’re talking about the example that we set with enoxaparin directly translates back to how they think about biosimilars which gives us real encouragement to the scientific platform that we build here and apply to biologics now will give us the same advantage as the biologic market.
It really comes down to what is the FDA is asking and how we’re thinking about it. This graph up here on your left is an FDA one. And they use this in almost all of their conferences, what they’re showing is that better analytics, more fingerprint like similarities to the brand molecules results in fewer clinical trials necessary. Janet Wilcoc herself says continuously in her presentations or repeatedly I guess is the way to say in her presentations, we are looking to make sure that we don’t have to do any unnecessary clinical trials.
So the way we’re approaching is to use those technology platforms I talked about with you before. We recognized their physical chemical process and biologic to actually make sure that we are: first, understanding the brand intimately; second, reproducing the critical attributes to try to make sure we have biosimilar with fingerprint like characterization, actually our goal is to make sure that we can – or to attempt to make something that has no distinguishing traits at all from the brand; and then to remove residual uncertainty to bio characterization that really gives us a much, much better picture than any clinical trial ever would of any potential differences between these molecules.
And as our hope to that, that we would be able to keep the trials to a minimum. Our belief actually is that ultimately you won’t have to do trials here, but we are not naïve. We think that in the early products we will definitely have to do trials and that’s the way we’re playing it in our early programs.
So summary, to give a technical platform which is state of art, and it’s really designed to take advantage of the FDA guidance that’s been given so far. We have a target of reducing clinical trials, getting extrapolation as well as interchangeability as well as being there at the start of these marketplaces. Our first CTA is filed in Europe, and that acceptance will happen soon. We’ll be in the clinic and we’ll trigger $12 million milestone, we believe this quarter.
We just received a $7 million milestone on the first development milestone for our second product with Baxter and it’d be broadening the portfolio significantly over the last year to have six additional products and we’re beginning to push into our pipeline.
Okay. Novel drugs, I love this part of the presentation, because in my one-on-ones I really get asked about our novel drug portfolio with everything that’s going on around Copaxone, but it’s really starting to build. I mentioned at the start that our portfolio or our business has actually developed out of a set of analytic tools that were first developed at MIT to try to get a better understanding of structure activity relationships of these complex biologic molecules. So we were founded as new drug company.
The generics if you will were as kind of a sidetrack to be able to bring in revenue much earlier than we can with new drugs. Now, we know it’s taken a little bit time but certainly we’ve been able to get revenues into our company much earlier than we would have just starting as a novel drug company. But now this pipeline starting to build behind it, I just wanted to give you a preview of it.
This pipeline, if you think about it, it is directly a result of the work that we’ve done on the generic side. Our novel oncology drug is a heparin drug that came out of our Lovenox work. The portfolio that I’ll talk to you about in our autoimmune anti-inflammatory is directly out of the work, the bio-characterization work that we’re doing in Humira and other programs, as well as the attempt to make an improved version of IVIg. So this is directly falling out of those tools, same tool set.
Here’s the pipeline so far. Necuparanib is our oncology program and we have that program going into Phase 2 or Part B of our trial, as well as looking at additional indications. And then we have three programs that we actually announced recently at our R&D day which has the potential to be in the clinic within the next 18 months to 24 months, directly derived from the activity – resource and activity of IVIg in autoimmune disease.
The oncology side I’ll start with – it’s a heparin. Why use a heparin for cancer? Well, there’s actually quite a lot of knowledge out there around heparins having an effect in cancer. We showed a lot of metadata analysis as well as clinical trials done by Pfizer on their anticoagulant heparins and it’s well known that heparin is buying to a lot of cancer targets including selectin, heparanases, VEGF, FGF. But the typical problem here is that you can’t dose very high or you get bleeding.
So we went back and said let’s optimize this product. Let’s make sure we can do chemical modifications of heparins and [indiscernible] series and families which allow us to actually target these cancer targets, down the anticoagulation so we can get much higher fold activity against these targets than you could ever get with a natural heparin. That’s what they set out to do.
This was the pretty traditional drug development effort. We’re using heparin series as opposed to synthetic. We basically did a bunch of chemical modifications to develop some lead series. We screened them against the cancer targets that we knew heparin binds to, to try to make the maximum binding against the broadest variety of targets we could do and then we worked to measure the anticoagulant activity to see if we could reduce those as far as we could. And that was the molecule that we took forward into the clinic.
So we started in pancreatic cancer because we had very good pre-clinical results for the pancreatic cancer in the tugase [ph] which is a naturally developed disease model and we saw that it actually looked much better than looking at gemcitabine alone and gemcitabine plus the Abraxane, which is the standard of care.
We recently revealed our Phase 1 results and I understand these are Phase 1 oncology results but I will tell you what my head of developments and I agree with them, this is about all we could hope for out of the Phase 1 study. So the things we’re looking for in Phase 1 is number one, how do the patients do, just generally how do they do.
In our trial we saw 2011, 2012, 92% of patients variable had controlled disease, which basically is stable disease, partial response and complete response. That’s higher than certainly the pivotal trials that have been out there in other areas. So we felt pretty good that the patients were responding to our combination therapy.
Secondly, you look at overall time on therapy. And this chart over here, that doses we’re actually using are the ones that are the shorter bars because they had, A, dealt long enough, but we’re seeing very encouraging data on both progression free survival and overall survival in the Phase 1 trial.
Again, Phase 1 does not randomize, but we are seeing actually we are getting good prolongation. These lines on these charts, that dark line is the overall survival line for the gemcitabine plus the Abraxane trial that Celgene did.
Just as importantly and actually plus that’s more important for that, I mean, it’s been in cancer a long time, that’s what we did to kairon [ph] when it was there. The CA 19-9 data which is a biomarker that actually is correlated to good response in pancreatic cancer, so for example in the Celgene trial that have been done, patients that have had this and I think they had in the 70s percentage point actually did had eight months additional survival over the standard patients that didn’t have this elevation.
In our trial, we had over 90% response and actually my – we have one patient that we couldn’t put in the category, because they went from a low number already to non-deductable, so basically we had very, very strong response in the biomarker data, so on the Phase 1 data where we got to a very high dose, which we are trying to with good response on the patient side good survival and very good biomarkers.
The other important thing that’s on the slide is that the safety data looked very good. We had no additional safety signals that we would not expect with gemcitabine plus Abraxane. And just as important, we saw no trends as we increased the dose, which means that this is a very safe addition to this regimen as well as it goes very well for adding this to another cancer types, another therapy types and another combination agent, so it’s looking very clean on the safety side, which is very good news.
So we started our Phase II trial, our Part B of our trial. It’s a randomized trial versus our drug added to gemcitabine, Abraxane, again standard of care which is gem and Abraxane alone. It’s powered for overall survival in patients, in well, the other regimen, I just talked about with secondary endpoints and progression free survival response rate and looking at the biomarkers.
And then we are looking at a whole series of other potential biomarkers that we are looking here as well and, of course, tracking anticoagulation because there is still some in this molecule.
This trial we should enroll over the next year. With the year follow-up we should be able to give new data on this trial and probably at the end of 2016, is roughly the timeline we will be shooting for.
I’ll skip this, because I just talked about most of the attributes and finish up with our novel candidate. These are preclinical compounds, but again it’s the power of the business model. So we took IVIg, which we actually had looked at – we bought the assets of Virdante which had failed trials in terms of trying to get their product working. And we are able to in 18 months – I’m sorry, two years generate three candidates that are actually going to after the base biology of how IVIg works in autoimmune disease. I will point out that in IVIg sales there is $3 billion to $4 billion of sales in these indications so we are going after here.
Let me talk about these molecules quickly. One is the Hyper-sialylated the original Virdante molecule which is using sialylation on natural IVIg to actually potentiate it, to give you a higher potency if you use less drug. That drug, it looks quite promising, in that we have developed that. We know how to manufacture. We’ve reproduced the academic results in an industrial setting. So now we’re ready to actually partner that drug.
We have made the decision, we are partnering this drug, because it’s important to have an IVIg supply chain behind this, and we don’t feel we would be competitive in trying to build that supply chain, so we are working to build that drug.
Actually more exciting for me when I – in looking at what we are trying to create here is, while we were doing that our scientists went back and said, can we actually begin to in a recombinant molecule, reproduce the kinds of effects that we are seeing in IVIg. And what we designed was this thing we called SIF3 which is basically a combination of three Fc regions of IgG antibodies bound by a specifically designed linker to maximize the binding potential of those.
The preclinical data on those looks outstanding in terms of the potency that we can get versus IVIg. So it actually – what our goal here is to actually replace IVIg with a recombinant molecule get it out of the plasma supply chain and dramatically reduce the dose required. So you don’t have to have all-day doing that you have to have with IVIg in these diseases. So we are quite optimistic that there is a big opportunity for this molecule and now we’re moving to clinic as expeditiously as possible.
The final molecule I’ll talk about here is our anti-FcRn, antibody. This is another variation in the theme. So the ability to reduce those comes in a number of ways, and here we are going after a molecule that actually protects those molecules from getting digested in the cells. If you can block the molecule, your cells will rapidly clearly IGG molecules. So in autoimmune where you are seeing is rapid up regulation in immune response, this drug actually has the potential to actually down regulate that very quickly and then for address flares or even prevent flares.
Talking about the targets, but the important thing is why are we going after Fc, while Fc bindings of IGGs is really critical across a number of biology including target function, ADC, CDC as well as immune complex formation. All of these impact thesis of that, the list of diseases is very long. And then we can go after here. And so what are really looking at is trying to go after that large IVIg market with much more rationally designed molecules that are tailored to what we’re trying to treat here.
So here is a quick summary and then we can go to our break-out. So we have complex generics where we are waiting for our approval, we think we are ready for it. We have our royalty still coming from enoxaparin. CTA filed in Europe for our lead product, biosimilar Humira, which well get a $12 million milestone this quarter. Our next program we got $7 million milestone in October, which is another autoimmune which we haven’t named yet. We added six programs in our biosimilars portfolio that actually begin to fill that engine we built.
Our Phase II compound is growing strong with very good Phase I data and then we have three programs that we developed on the new drug to fight autoimmune that will be in the clinic within the next 18 to 24 months. So that’s us; lot happening in the business. The complexion of it has changed a lot in the last four years and we really think we have a pretty robust portfolio to be able to bring forward now. So I’ll stop there and I think we can go to break-out, so thank you.
[No formal Q&A session for this event]
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