Biotech Values

[dumaflotchie]

Dew and All:

After reading the transcript of their earnings call, I was struck by what could be a significant strategy change regarding how they bring new drug candidates forth.

Previously, they seemed (wisely IMO) to prefer allowing more experienced, larger and better capitalized companies to partner with. This seemed wise on numerous levels.

But now they intimated (vaguely in all fairness) about more solo involvement.

Now while they have developed a nice war chest reserve, we have all seen how quickly these war chests can get depleted (EXEL as an example) when trying to go it alone.

Any thoughts on this new strategy or much to do about nothing? It seems either a strategy change or perhaps insight into the challenges of their present discussions with partners for the FoB program who may be playing hardball?

Here is the link:

http://seekingalpha.com/article/285192-momenta-pharmaceuticals-ceo-discusses-q2-2011-results-earnings-call-transcript?part=qanda


However, the nature of the kind of deals, I would say, both on the follow-on biologics side is potentially the new drug side as well, have changed now that we have cash balance. In other words, we have the ability to take programs along further if we feel that we actually are going to get a higher partnership value for those by bringing them further along in the pipeline.

We also have the ability to potentially co-invest which actually leaves us the potential to actually get a higher share of the revenues of those products and ultimate success. So, we think we need to use it judiciously but we still think we need partnerships. We think that actually really significantly increases our ability to invest and therefore capture upside profits in the future. So we’re looking at it as actually enhancing the trajectory of the company though we’re not really adjusting too much in terms of our goal for partnership. It does give us much more freedom to invest.