Biotech Values

[DewDiligence]

Re: Threshold for Lovenox switch from 10% to 12% gross royalty

…from my detailed parsing of the redacted agreement that I posted a while back - I believe the threshold, while undisclosed, was a common defined term that appears in each of the subsections referring to profit share, hybrid, and royalty economic models, respectively.

I just reread the 2003 NVS-MNTA Lovenox agreement in http://sec.gov/Archives/edgar/data/1235010/000104746904007521/a2130432zex-10_4.txt and I fail to see support for your contention that the threshold separating the two tiers in straight-royalty mode is the same dollar amount as the threshold for switching from royalty mode to profit-share mode in the prior “hybrid” scheme.

The relevant language is in Section 4.6.1 of the aforementioned SEC filing on page 28; it reads:

4.6.1 Upon termination of the [**] Period, Section 4.5 shall no longer apply. Subject to the provisions of Section 4.8, if such termination occurs after the [**] anniversary of the U.S. Launch, then, following such termination (subject to the provisions of Section 4.9), for each Post-Launch Quarter during which Sandoz, its Affiliates or distributors is selling the Product in the U.S. Territory (the "[**] PERIOD"), Sandoz shall pay Momenta a royalty (the "[**][**] ROYALTY") as a percentage of Net Sales of the Product in the U.S. Territory to be computed according to the following table, by multiplying Net Sales in the U.S. Territory for such Post-Launch Quarter times the applicable percentage listed in the following table:

 
 Net Sales in U.S. Territory 
 During a Post-Launch Year                Royalty Rate 
 ---------------------------              ------------ 
  
 First US$[**] Million in Net Sales        [**]% 
  
 Over  US$[**] Million in Net Sales        [**]%