Biotech Values

[DewDiligence]

Estimating MNTA’s Copaxone Milestone Payments from NVS

[Updated and simplified.]


The events that trigger milestone payments from NVS to MNTA are set forth
in a 2006 SEC filing*. The sizes of the individual milestone payments are
unknown because the figures have been redacted in the SEC filing; however,
we know from disclosures by MNTA that the total potential milestones for
Copaxone in the US and Lovenox in the EU are $163M (#msg-44687884).

It’s unlikely that NVS/MNTA will seek to commercialize generic Lovenox in
the EU because, in most EU countries, the average selling price for branded
Lovenox is too low for a generic to be an attractive business proposition.
However, it’s nevertheless helpful to guess what NVS’ milestone payments
for generic Lovenox in the EU would be insofar as the cumulative amount
of such Lovenox-EU payments can be deducted from the known $163M
amount of total potential milestones to arrive at the cumulative amount of
potential milestones payable by NVS for the Copaxone program in the US.
Based on my guesses below, $115M of the $163M is attributable to Copaxone.



Copaxone Milestones

[Guess: $115M all told.]

• FDA approval of Copaxone ANDA (provided that Mylan’s ANDA is not approved first). [Guess $35M.]

• Launch of generic Copaxone (provided that Mylan does not launch first). [Guess: $15M.]

• Payments on the first N anniversaries [guess: N=5] of the US launch if there is no other generic Copaxone in the market and the net profits from generic Copaxone exceed an unspecified threshold. [Guess: $30M ($6M x 5).]

• Exceeding an unspecified lower sales threshold during a 12-month period. [Guess: $15M.]

• Exceeding an unspecified higher sales threshold during a 12-month period that does not overlap with the period for the lower threshold described above. [Guess: $20M.]



Lovenox Milestones†

[Guess: $48M all told.]

• Launch of generic Lovenox in any EU country. [Guess: $28M.]

• Payments on the first N anniversaries [guess: N=5] of the first launch in any EU country if there is no other generic Lovenox in the EU and the net profits from generic Lovenox in all EU countries exceed an unspecified threshold. [Guess: $20M ($4M x 5).]


* See http://sec.gov/Archives/edgar/data/1235010/000110465906072600/a06-21723_1ex10d3.htm .

† These $48M of milestones are unlikely to ever be paid, but they are worth estimating for the reason described in the header of this post.