Momenta Pharmaceuticals, Inc. (MNTA)

[jbog]

Jmkobers,

My theory is not as far fetched as it seems, but it really relies on why Sandoz contracted out the Fill/Finish operation to begin with.

The Fill/Finish operation is probably the most contracted service that large Pharma's employ. They do it for two reasons.

First, to make the real drug (API) is relatively easy from the sanitary standpoint. You would make the product in an sanitized air tight vessel or reactor. Everything is piped directly into it and if you never open the covers the chance of the drug becoming polluted is extremely remote.

This vessel is then disconnected from the piping and it's ready to be shipped to the Fill/Finish portion.

When it hits the FF suite this is the first time that the API meets the real world. Normally it has to be diluted with a carrier (mannitrol in copaxones case) and then put into vials or injectors.

The vials have to be sanitized and in todays world they used whats called an aseptic filling system. What aseptic means in the filling operation isn't sanitary or sterile as you and I would know but rather it comprises of sterile air.

Where ever the product and vials go there is an air hood (ducting) above them blowing HEPA cleaned air down on them. This air current is what is sterile. Never ever can anything block or deflect this air. Reach your hand under the vial as much as you want but put a finger above a vial and you breached the sterility. One foot away from the product/conveyor is really not clean by our expectations.

So, I got a little off track. As you can see the FF operation takes a bigger, more complicated foot print that making the API itself.

Now as far as Sandoz (and many others) goes, how big a FF suite would you build at this point? 100 vials/day, 10,000 vials/day or 100,000 vials/day?

Many companies would contract this operation until they could answer this question. If it's 100 vials/day why bother bringing it inhouse. If it's 100,000 then they can build the proper suite.

So my point was that it is very possible that Sandoz always had the intent to eventually bring it inhouse.