Biotech Values

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Momenta bucks the pharma tide on generics
By Julie Donnelly

The debate in Washington over protecting the intellectual property of biotech companies who make so-called biologic drugs has united most of the industry players here in New England. Most, but not all.

While most biotechs want data exclusivity for as long as possible, Cambridge-based Momenta Pharmaceuticals Inc. is writing to Congress and calling on biotech industry associations to advocate for shorter protections for biologics. That’s because the company has a technology platform it says can help make generic versions of the drugs.

“One of the things I find most disappointing is that the biotech industry is not debating the actual science,” Momenta CEO Craig Wheeler said. Wheeler disputes the widely-held idea that exact copies cannot be made of biologic drugs, because they contain living material. “For an industry that is built on innovation, to say something can’t be done, that is the wrong way to go. It’s two-faced,“ he said. Momenta officials say the company’s technology provides a series of analytic tools to help determine and reproduce exactly how a biologic was made.

Biologics are complex drugs made from biological material such as proteins, peptides or enzymes. The drugs often have a high level of specificity, and analysts say they may hold the key to treatments for diseases like Alzheimer’s. It’s complicated to manufacture the drugs, and regulators’ concerns over potential safety hazards have so far prevented generics companies from marketing so-called biosimilars in the U.S.

The stakes are high. The global market of protein-based therapeutics, for example, is expected to grow at 15 percent per year over the next decade, according to the publication Genetic Engineering and Biotechnology News.

The argument of the Massachusetts Biotechnology Council, and much of the rest of the biotech community, is that innovation is incredibly expensive. It’s a risky business, and if companies can’t recoup their costs, they can’t invest in that next treatment, industry executives say.

“Despite advances in science and technology, we’re not very good at increasing the probability of success,” said Jim Green, senior vice president at Biogen Idec Inc. Typically only one out of every 10 drugs succeeds, and the winners have to pay for the losers, Green said. MBC chairman Bob Coughlin said that a short period of data exclusivity would also be a disincentive for companies to work on rare diseases that have small numbers of patients.

Momenta officials are voicing their displeasure about the current U.S. Senate proposal of 12 years of intellectual property protection for biologics. The company would prefer a House proposal that would extend only five years of intellectual property protection. But some analysts say that whatever the outcome of the Congressional debate, any kind of regulatory pathway to market a biosimilar would benefit the company. Investment bank Rodman and Renshaw analyst Simos Simeonidis wrote in a research note that Momenta would likely become an attractive acquisition target. “Big pharma companies, and some of the major generics companies, would be interested in keeping all to themselves both the technology and the internal capabilities and know-how of Momenta,” Simeonidis wrote.

Rodman and Renshaw is so bullish on Momenta that it has a 12-month target price of $30 for the company. Momenta’s (Nasdaq: MNTA) shares closed at $11.28 on Tuesday.

Momenta Pharmaceuticals had a net loss of $17.9 million for the first quarter, as compared with a net loss of $13.3 million for the first quarter of 2008. Company officials said this was largely due to an increase in research and development costs, which were $15.8 million for the first quarter, up from $412.9 million for the same period last year. Momenta had $87.9 million in cash on hand on March 31, down from $108.5 million on Dec. 31, 2008. The company burned through $20.6 million during the first quarter, but company officials say the full-year cash burn will be $55 million.


http://www.masshightech.com/stories/2009/07/20/weekly13-Momenta-bucks-the-pharma-tide-on-generics.html