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MNTA: Q1 Transcript from seekingAlpha.com (minor edits; as usual, these 3rd-party transcripts have numerous errors, since they're transcribed in India or wherever)
Craig Wheeler

Thanks Beverly, and good morning, and thank you for joining us on our call today. During my comments today, I will provide an update on recent developments and provide some insight into the progress of our programs. I'll then turn the call over to Rick Shea for financial update.

I'd like to begin today with an update on M-Enoxaparin, our generic version of Lovenox, which we are developing with Sandoz. The ANDA for M-Enox filed in 2005 remains under FDA review. As you know, in November of 2007, Sandoz received a letter for the FDA stating that the ANDA was not approvable at that time because it did not address the potential for the immunogenicity of the product.

Based on our interactions with the agency, Sandoz and Momenta submitted a briefing book outlining our proposed plan to address the agency's questions. The proposal included additional characterization information, as well as in vitro and in vivo studies. We have been executing on the plan outlined in that briefing book.

Early last week, we received additional written guidance from the FDA regarding our proposed response. We were very pleased to report that the guidance indicated a general concurrence with our approach and our proposal. At this time, the FDA has not requested data from clinical trials. The FDA's letter did ask us for additional data from in vitro and in vivo animal tests in the areas that we had proposed.

There were three types of requests. First, they have asked for an expansion in the number of samples tested to give them confidence across the range of lots of both our product and innovator product. Second, they have asked for information on the sensitivity of some of our proposed tests. And third, and some of this depends on our dialogue concerning those tests, they will require us to do some additionally orthogonal tests to verify the results from some areas.

Our assessment of the FDA's letter gives us confidence that we can complete our work, submit our amendment in the third quarter of this year. Much of the work had already been completed in the period since we submitted the briefing book. While we continue to believe that an approval of the ANDA maybe possible in 2008, it will depend on when in Q3 we file the amendment and the amount of time the FDA needs to review it. We underscore that it is very difficult to estimate the timing of FDA actions and whether they will request additional data.

Next, I would like to address an issue which has been very prominent in the media recently, the adverse clinical events associated with the use of heparin. As most of you now know, Momenta has been an integral part of the scientific collaborations to determine the identity of the heparin contaminant and to assess the link of the contaminant to the adverse clinical events.

In the first quarter of this year, the FDA sought assistance to help them resolve the heparin crisis that was rapidly unfolding. Ram Sasisekharan, an MIT faculty member who is one of the Founders and a Board Member of Momenta, working in conjunction with the FDA, assembled a group of leaders in the field that included academic experts and Momenta scientists. Momenta's scientific team received blinded heparin samples, which we used to conduct both characterization and biological experiments.

On April 23rd, Nature Biotechnology published a paper that identified the contaminant as oversulfated chondroitin sulfate. The authors of that paper included several scientists at the FDA, scientists from MIT, the Ronzoni Institute, other academic centers and Momenta. Notably, two of the three lead authors were Momenta scientists. We used our characterization and heparin analytic tools to identify the contaminant in the samples.

Also, on April 23rd, the New England Journal of Medicine published a paper that established a potential link between the oversulfated chondroitin sulfate and the types of immune reactions associated with the adverse clinical events. The authors of that paper also included several scientists at the FDA, MIT, Momenta and the Virginia Tech College of Veterinary Medicine. And again, the first author of the paper was Kei Kishimoto, our VP of Disease Biology.

This work highlighted the capabilities of our biology group, which has been built up at the company over the past several years to support our drug discovery efforts, as well as our move to advance more complex generics such as polypeptides and glycoproteins.

We at Momenta were very pleased to be able to contribute to addressing this critical international public health issue. As part of the response to this crisis, the FDA is now requiring that a series of analytic tests be run on all heparin products intended for patient use. This includes the low-molecular-weight heparins, such as Lovenox, M-Enoxaparin and our novel anticoagulant M118.

We have re-examined our inventory of M-Enoxaparin and M118 and have confirmed there is no evidence of contamination in our products. We believe that this issue has made it clear that a detailed understanding of all structural components of the complex-mixture products, such as Lovenox, is essential.

The crisis has also raised concerns about the short-term supply of heparin in the world market. The contamination will impact heparin supply in two areas. First, tighter controls may put supply restrictions on some of the traditional suppliers. And second, there will be additional demand for heparin as manufacturers seek to replace contaminated inventories in the global markets.

Overtime, we expect this situation will be mitigated by the implementation of the test the FDA is now mandating. As we require this material for our M-Enox and M118 manufacturing, we and our partner Sandoz are now turning our attention to ensuring we can access sufficient high-quality supply to meet our needs.

I'll now briefly review the status of the Lovenox patent litigation. The appeal hearing took place in early January, and we continue to await a written decision. If, as we anticipate, the Court of Appeals upholds the District Court decision rendering the Lovenox Orange Book patents unenforceable, the issuance of a final mandate on that decision will trigger the start of the 180-day clock for the first-to-file applicant.

We anticipate a written decision any day now, as the typical timeline following oral hearings is three to six months for a written opinion. Once that opinion is released, there will be procedural steps, which could take up to two months to issue a final mandate and start the 180-day clock. Following the expiration of that 180-day exclusivity period, Momenta and Sandoz would be free to launch our product upon approval.

I'll now turn to our M118 novel anticoagulant program. In April, we announced that the key results from Phase I study of our M118 IV product were presented at the American Society for Clinical Pharmacology and Therapeutics Annual Meeting. Based on the product attributes demonstrated in the Phase I studies and provided that further robust controlled clinical trials confirm and extend these results, we believe that M118 has the possibility to be significantly differentiated from other antithrombotic agents used in ACS.

The studies support our belief that M118 has the potential for broad usage as the baseline anticoagulant in ACS. Let me review the findings to date briefly.

First, clinical results have demonstrated that we have successfully engineered the compound to retain the key clinical attributes of both unfractionated heparin and low-molecular weight heparins. Specifically, the compound has both significant anti-Xa and IIa, it's measurable standard clotting time assays, it's reversible with protamine sulfate.

Second, the molecule has retained the benefits of a low molecular weight heparin including predictable PK behavior and the ability to be administered subcutaneously.

Third, the unique attributes of M118, including conserved sequences, charge structure and low polydispersity, point to the potential for an improved therapeutic index. These attributes include a constant anti-Xa to anti-IIa ratio as the drug is metabolized, activity against other elements in the clotting cascade, including TFPI, IXa and a lack of platelet activation, which is commonly observed following the administration of unfractionated heparin.

The results from our Phase I program to date have demonstrated that intravenously administered M118 has been well tolerated, has demonstrated rapid measurable and predictable dose-dependent increases in anticoagulant activity. One of the key findings from the Phase I study presented was that the activated clotting time regarding a reading of greater than 200 seconds was achieved in the higher-dose cohort. This suggests that an intravenous bolus administration of M118 can produce ACT levels comparable to levels expected with standard heparin dosage used in conjunction with PCI.

Additionally, our Phase I results also demonstrate that M118 has no significant drug-drug interactions with medications commonly prescribed for the treatment of ACS including aspirin, clopidogrel and GP IIb/IIIa inhibitors. We are continuing to actively enroll patients in our Phase IIA PCI trial and are hoping to report topline results by the end of this year.

As I mentioned in our last earnings call, we've initiated preliminary discussions with potential partners for M118 and are looking to secure a development and commercial partnership following the completion of the Phase IIa study.

Next, just a brief word on M356, our generic version of Teva's MS drug Copaxone, which we're developing in conjunction with Sandoz. Our development of M356 represents an important next step for the company demonstrating that our characterization and process technologies can be applied to complex mixtures beyond the sugar sequences in heparin-based drugs such as Lovenox.

For competitive reasons, we are not detailing specific timelines for this project, but I will say that we are pleased with our progress to date.

Let me now turn to our follow-on biologics program where we are focused on extending our technology for the analysis of complex sugars and peptides to glycoproteins. Many companies have announced they will develop follow-on biologics programs. This is not surprising as this is a large and untapped market.

However, we believe that success in follow-on biologics will require a differentiated strategy. Our belief is that the business will require global-scale, cost-effective manufacturing, and most important, the ability to create products that are differentiated from competitors biosimilar products.

We believe that Momenta's technology is a key to this differentiation. Our goal is to demonstrate therapeutic equivalents. Our intent is to develop follow-on biologics that are not simply biosimilar, but have the potential to be biogenerics, interchangeable and substitutable for branded biologics. The strategy is intended to differentiate us with both regulators and in the marketplace.

Our approach to the structural analysis of proteins is an extension of the expertise we have developed with heparins and peptides. Over the past two years, we have developed and are continuing to extend novel and proprietary methods and tools for characterizing glycoproteins. We have also worked to develop methods to establish and control the linkages between the protein structural variation and the manufacturing process variations.

Based on our progress over the past year, we are seeking to expand our efforts in the follow-on biologics arena. First, our work is continuing under the 2006 collaboration with Sandoz. We continue to be optimistic that this partnership can yield early evidence of the power of Momenta's glycoprotein technology.

Second, we are actively exploring ways to broaden our participation in the follow-on biologics field. Beyond the programs with Sandoz, Momenta is free to develop follow-on biologics on our own or to seek collaborations. In 2008, we are working to define our path to create a leading competitive position in the follow-on biologics field, and hope to have more to talk to you about by the end of the year.

I'll now turn the call over to Rick to provide a financial update.

Rick Shea

Thank you, Craig. I think that the financial results of the quarter were straightforward, so I won't review the changes in revenues and operating expenses in detail.

The net loss for the first quarter of 2008 was $13.3 million or a loss of $0.37 per share, as compared to a net loss of $17 million, or a loss of $0.48 per share for the first quarter of 2007. The decrease in the net loss was the result of increased collaboration revenue due to increased reimbursable R&D expenses, and lower G&A expenses due to decreased stock compensation, professional fees and other legal expenses offset by lower interest income.

We ended the first quarter with approximately $124 million in cash and marketable securities compared with approximately $136 million at the beginning of the year. Our cash burn for the first quarter was $12.4 million, and we continue to anticipate a cash burn of between $50 million and $55 million for 2008.

This concludes my financial review. We'll now open the call to questions. Operator?

Questions-and-Answer Session

Operator

Thank you, sir. (Operator Instructions). And our first question comes from Eric Schmidt from Cohen.

Eric Schmidt - Cowen

Hello, good morning. Thanks for taking my question. I guess two questions on M-Enoxaparin. Craig, you mentioned that the FDA is now mandating new testing to identify this oversulfated chondroitin sulfate contaminant. Do those tests have anything to do with your technology, specifically?

Craig Wheeler

Yes, so the tests that the FDA is mandating are 1D NMR tests as well as capillary electrophoresis testing. Those tests don't specifically rely on Momenta technology; they are standard tests that are tuned to be able to detect a contaminant. It's important to note those tests are designed to detect the contaminant in a sample; they're not designed to characterize and evaluate what it is. It just allows people to see if their samples are contaminated or not.

Eric Schmidt - Cowen

So they're not requiring a more I guess complex characterization or complete characterization?

Craig Wheeler

No, if you see it, you can't use it.

Eric Schmidt - Cowen

Okay. And then, on your efforts to respond to the FDA's letter from November, you mentioned I think three things that the FDA has asked of you in terms of maybe further validating and proving your technology. I guess the question I have is, with the FDA asking for those further, I guess proofs of concepts, how do you characterize the progress that you've made? I mean, are you getting some sort of buy-in so that you think the further requests are going to get you over the goal line, or are we really starting more from square one, and the FDA hasn't really fully suck its teeth into the technology yet?

Craig Wheeler

No, I don't -- I think it's more where these questions came after, but FDA had actually spent quite a bit of time understanding the application. These questions were really specifically around the potential for immunogenicity rather than the characterization of the core product. So I think, certainly we use every chance we get to continue to be able to provide the data to establish some characterization that really gives you detailed information of the structures. But I think the questions that were asked here were very specifically around the potential for immunogenicity, which we could use some of our technology, but it would also include some of the more traditional technologies.

Eric Schmidt - Cowen

Well let me ask a follow-up then, if I could. If the FDA has bought into the characterization technology and believes your product essentially to be identical within a range to M-Enoxaparin, how could your product have different immunogenicity than the innovator product?

Craig Wheeler

Well, that's specifically the same way we approached it. I mean, we think we have the characterization technology that actually demonstrates everything in there, but the tests that we're doing, which are more traditional, looking for contaminants are validating that. But -- so, I think this is yet another way to show that you actually had the tools in place to make sure that those things didn't happen.

Eric Schmidt - Cowen

Okay, thanks a lot.

Craig Wheeler

Sure.

Operator

And our next question comes from Robyn Karnauskas from Bear Stearns.

Robyn Karnauskas - Bear Stearns

Hi, thanks for taking my question and I apologize for the background noise. I guess my first question is, can you give us a better sense now how you think the FDA defined immunogenicity in their original letter? Do you think it's related to the concerns regarding the contaminant in heparin?

Craig Wheeler

Sure. I mean, that's really hard for us to say definitively, but the letter certainly came to us well before the FDA began to really aggressively address any contaminants in heparin. So I suspect there wasn't a link, but I don't know for sure. The questions as we said before were really looking at the potential for immunogenicity which encompasses things around the potential for the agent itself to cause immune reactions, as in heparin it is thrombocytopenia, as well as the potential for contaminants to induce reaction if there is potential contaminants in the drug. So, but there was nothing specific that was going after oversulfated chondroitin sulfate.

Robyn Karnauskas - Bear Stearns

Thanks. And the other question I have is regarding M118. Can you give us an update on how enrollment is going in the Phase II? And what you expect to be released in the topline or the preliminary data that's the end of this year?

Craig Wheeler

Sure. I'll turn that over to Jim Roach, our new Chief Medical Officer.

Jim Roach

All right. Hi, thanks for the question.M118 Enrollment is going a little more slowly than we originally anticipated, however, we've put a lot of steps into place over the last month with respect to enrolling additional sites and making some minor protocol modifications such that we expect that enrollment will pick up. And we're still very optimistic about presenting topline results by the end of the year based on the changes that we've put into place. Certainly, in the last month, enrollment has picked up relative to the first part of the year.

Robyn Karnauskas - Bear Stearns

So what do you expect to be release in the topline data or what should we be expecting to see?

Jim Roach

Oh, at the end of the year. Well I think at the end of the year, with respect to the topline results, we would anticipate presenting some of the key primary and secondary efficacy endpoints, as well as the safety variables we're looking at. I'm not sure that we've discussed --.

Craig Wheeler

No, I think the key is, this will be the first time that the drug has been in patients and so you'll be -- you'll have pretty good evidence of safety and efficacy in the use of the drug in the PCI setting. We don't expect with the number of patients that are in there, we're going to see real signs of superiority because the trial is not powered to do that.

Robyn Karnauskas - Bear Stearns

Okay, great. Thank you.

Operator

(Operator Instructions).

Craig Wheeler

Okay.

Operator

And it appears there are no further questions at this time. I'd like to turn the conference back over to our speakers for any additional or closing remarks.

Craig Wheeler

Okay. I'd just like to thank everybody for joining us on our call, and we look forward to updating you on our progress in the coming months. Thank you and goodbye.