Momenta Pharmaceuticals' CEO Discusses Q1 2012 Results - Earnings Call Transcript

Momenta Pharmaceuticals, Inc. (MNTA)

Q1 2012 Earnings Call

May 3, 2012 10:00 AM ET

Executives

Lora Pike – Senior Director, IR and Corporate Communications

Craig Wheeler – President and CEO

Rick Shea – SVP and CFO

Analysts

Sapna Srivastava – Goldman Sachs

Ritu Baral – Canaccord

Sumant Kulkarni – Bank of America

Eric Schmidt – Cowen & Company

Joseph Schwartz – Leerink Swann

Presentation

Operator

Good day, ladies and gentlemen and thank you for your patience. You’ve joined the Momenta Pharmaceuticals First Quarter 2012 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) As a reminder, this conference may be recorded.

I would now like to turn the call over to your host, the Senior Director of Investor Relations and Corporate Communications, Ms. Lora Pike. Ma’am, you may begin.

Lora Pike

Thank you and good morning, everyone. I want to welcome all of you to Momenta’s conference call to discuss financial results for the first quarter of 2011. With me on the call today with prepared remarks are Craig Wheeler, President and Chief Executive Officer, who will provide an update on our major programs. Followed by Rick Shea, Chief Financial Officer who will review our first quarter results and comment on our plans to reinvest in the company to drive future growth. Also joining us today for the Q&A portion of the call is Dr. Jim Roach, our Chief Medical Officer.

Before we begin, I’d like to mention that our call today will contain forward-looking statements about management’s future expectations, beliefs, plans and prospects. These forward-looking statements include comments about our enoxaparin sodium injection commercial prospects, our generic Copaxone program, ANDA review and patent litigation expectations and our other product development plans and expectations, including our future development, partnering and commercialization potential for our development programs.

Such forward looking statements involve known and unknown risks, uncertainties, and other factors referred to in the company’s annual report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission under the section Risk Factors as well as other documents that may be filed by Momenta from time to time with the SEC.

As a result of such risks, the company’s actual results may differ materially from those we will be discussing. We’re providing the information on this conference call as of today’s date and we assume no obligation to update these comments.

With that, I will now turn the call over to Craig.

Craig Wheeler

Thank you, Lora and good morning, everyone. Thanks for joining us. I’d like to start today by introducing all of you to Lora Pike, our new Senior Director of Investor Relations and Corporate Communications. I’m sure many of you already know Lora from her Vertex experience. She has tremendous depth in the IR area and we’re thrilled that she has chosen to join us here at Momenta.

I’d also like to personally thank Beverly Holley, who has retired after a long and productive career, including the past five years ably serving as Momenta’s Senior IR executive. Her counsel will be missed and we offer her our best wishes.

Now, turning to the business at hand. The first quarter of 2012 was a period of significant transition for the company. First, in January, as a result of the Court of Appeals staying the preliminary injunction on our competitors’ launch of their generic Lovenox, Momenta’s enoxaparin revenues transition from a hybrid royalty profit to a tiered royalty-based arrangement.

Second, in February, our follow-on biologics deal with Baxter officially closed and we commenced our work in collaboration with Baxter to bring up the sixth biosimilar and potentially interchangeable drugs to market.

Third, during the first quarter, we began a research effort to apply our recently acquired Sialic Switch technology to the development of a sialylated related IDIG product.

And, finally we are presenting – presently screening patients in the next few weeks and expect to initiate dosing in a proof of concept phase I & II clinical trial for our novel drug M402, in people with metastatic pancreatic cancer.

I’d like to focus my prepared remarks today on a review of our three core areas, complex generics, Biosimilars and novel drugs.

First, our market drug, enoxaparin. We reported $22 million in enoxaparin product revenues, based on Sandoz reported net sales of $176 million. Our revenues included a hybrid profit share on net sales through late January, then a royalty in the balance of the quarter. Our reduced level of enoxaparin revenues in the first quarter of 2012 reflected the launch of our competitors in enoxoparin and the relaunch of Sanofi Winthrop’s authorized generic, Lovenox, which impacted Sandoz’s enoxaparin unit volume and pricing. Rick will provide additional context around these results in his remarks.

It’s important to note that as of today, the U. S. Court of Appeals has not issued a ruling regarding their rationale for staying in the preliminary injunction against Amphastar and Watson. That ruling could come at any time. In the underlying Enoxaparin patent litigation, there is a claims construction hearing tomorrow, May 4th. And the trial is scheduled for October of this year. So until we get a ruling in this litigation, Amphastar and Watson’s generic Lovenox is being marketed at risk.

On the commercial front, it’s still too early to predict how competition will evolve, but in the absence of an injunction, we expect to see an increasingly competitive environment. As I said last quarter, competition is a fact of life in the generics business. We’re proud that the Sandoz Momenta ANDA for generic Lovenox was the first to receive FDA approval and was the sole generic Lovenox for more than 18 months.

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