Biotech Values

[MTdinanM3]

MNTA - Leerink Swann's take on Copaxone Markman Hearing

January 21, 2010
OUTPERFORM

Joseph P. Schwartz

MOMENTA PHARMA, INC.
Markman Hearing Highlights Solid Arguments Against Copaxone Patent Validity

• Bottom Line: We are encouraged by the cogent arguments made by MNTA/Sandoz's counsel and we have further confidence that MNTA/Sandoz have a solid approach to potentially circumvent TEVA's Copaxone patents on the basis of invalidity due to inequitable conduct.

Reiterate Outperform and $16 fair value on MNTA.

• As expected, much of the claims construction centered around the term "average molecular weight" used in the Copaxone patents. MNTA/Sandoz argued that this term suffers from indefinateness since it doesn't specify average, weighted or peak measures, which greatly influence product specifications.

• We thought MNTA/Sandoz's counsel provided compelling intrinsic evidence (from the patents and their prosecution history) as well as extrinsic evidence (testimony from Copaxone inventors and TEVA's witnesses) who defaulted to different meanings for the term "average molecular weight" on different occasions. They also highlighted that TEVA was inconsistent in its claims that Copaxone is a random or nonrandom mixture of Copolymer 1 species with US & EU patent offices, as further evidence that TEVA played it "fast and loose" with the USPTO.

• The Markman Hearing also provided a preview of some intriguing summary judgment arguments by MNTA/Sandoz that the patents' written description of the invention are not sufficiently detailed to enable the specifications claimed. Copaxone patents exclude information on the standards and conditions (such as pH, flow rate, buffer medium) that greatly influence the size exclusion chromatography (SEC) methods used to make the drug. Thus, TEVA's claimed range of 5-9 Kd is not reproducible and the patents make it impossible to know whether a generic product made to conform to the same molecular weight range is the same as TEVA's product made using a different gel filtration column under different standards and conditions. MNTA had to use its technology to reverse engineer and characterize both product and process, since the patents do not teach these key aspects of the invention adequately.

• Next up, TEVA has until tomorrow, 1/22, to file its reply to MNTA's recent summary judgment motion, and then MNTA may file a rebuttal before another potential hearing. The judge is under no obligation to rule on this motion until the very end of the trial but it remains another potential way MNTA could clear TEVA's IP hurdles