Momenta Pharmaceuticals, Inc. (MNTA)

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Momenta Pharmaceuticals Inc. (MNTA)

Deutsche Bank 2012 dbAccess BioFEST Conference Transcript

December 4, 2012 1:05 PM ET

Executives

Rick Shea - Senior Vice President and CFO

Analysts

Robyn Karnauskas - Deutsche Bank

Presentation

Robyn Karnauskas - Deutsche Bank

Great. Good afternoon. My name is Robyn Karnauskas. I'm the Deutsche Bank, Biotechnology analyst. Next with us we have Momenta Pharmaceuticals and we the Chief Financial Officre Rick Shea.

For those of you who are listening to the webcast, feel free to email me with questions. My email address is robyn.karnauskas@db.com. And we'll read the questions anonymously. And of course if you are in the audience and you're (Inaudible) to ask a question feel free, just raise your hand and do so.

But thank you very much Rick, for doing it.

Rick Shea

Thank you, Robyn.

Robyn Karnauskas - Deutsche Bank

I know there's a lot of focus, I won't always focus is on the same things like the Copaxone clinical trial or ask them for clinical trial or [Copaxone] litigation and approval enoxaparin litigation, but I thought maybe we could just start with biosimilars. That's one part of your business, but it's going to be I think more relevant as biosimilars launched this year. So I think I guess first of all for people who are new, so maybe give a brief overview of the agreement you have with Baxter and I had some specific questions on some of the products.

Rick Shea

Okay, I can do that, Robyn. First, I just wanted to mention that I may make forward-looking statements so I draw your attention to our SEC filings and the risk factors included therein. The Baxter agreement was signed in the December of last year. It's a six product global collaboration, up to six biosimilars, two products were named at inception during the course of this year, when Baxter agreed on a third product that we would commence work on. They paid us $33 million dollars as an upfront fee, and we get development milestones that include technical progress milestones as well as regulatory progress, and the way those work is -- I would think about that as, each product that we develop has 3 milestones that has a kind of a medium term technical milestone that we could earn once we essentially establish proof of concept for the biosimilar.

And then when we file an IND we actually get two milestones, we get a technical milestone and then we get a milestone for filing the IND. And in the aggregate we disclose that the total of these milestones were of $92 million, over the six products actually for the first product some of those milestones were embedded in the upfront. Now in addition to that if we're able to substantially reduce the clinical program and particularly reducing from a phase 3 type of a clinical study to -- say a phase 2 type of a study we get to share and those cost savings with Baxter up to a maximum of $50 million per product.

And then finally upon commercialization we earn high single-digit royalty but that royalty rate could be more than doubled under some circumstances and that could be if we designated as interchangeable if we're the only product in the market or just only one competitor. So we do have upside in the commercial and now we fund the cost up through the IND filing, partly offset by the milestones and then post IND Baxter fund the programs.

Question-and-Answer Session

Robyn Karnauskas - Deutsche Bank

So the first question I had was, so what accounts, you talk a lot about on earnings calls doing technical proof of concept, what accounts were technical proof of concept, for biosimilars and is this different for antibodies versus just general protein biologics?

Rick Shea

Well the earlier stage, a technical proof of concept you as I said is, it's really having a product developed that we can demonstrate at a relatively small scale can hit our product quality attributes. And of course we are more rigorous in defining our product quality attributes, we believe then our competitors because of our characterization technologies, so that's a piece of it, there's an IP component, understanding the IP landscape on the product, and that's the earlier stage, now the technical milestone in connection with the IND, that really has to do with maintaining those product quality attribute at a higher scale. And therefore having a product that's ready to be filed with the FDA and ready to go into clinic.

Robyn Karnauskas - Deutsche Bank

And when you mention the IP component are you responsible of doing the work, the freedom to operate work around the IP or who is responsible for that, we do that initial work and then that's reviewed by Baxter in connection with that milestone. And when I think about your technology versus other technology in the past, you're able to do check signatures at the biologics there's a quite interest in the products -- the protein -- or the sugar structure over time, it's really consistent product made, the (Inaudible) else that over the last few years that you thought is important for ensuring quality, the quality control that you guys have implemented, anything else in addition to that do you think is important.

Rick Shea

Yeah, actually there's a lot that we consider important, we're not really revealing publically all of the test that we do, all of the [release] test that we'll be doing with our commercial product but we believe that those tests are substantially more robust and extensive than -- than our competitors would be using.

Read the rest of this transcript for free on seekingalpha.com