Biotech Values

[DewDiligence]

Timing of FoB payments MNTA expects from BAX (revised):

Based on today’s webcast at the Lazard conference, I now think M923, the
first compound in the BAX-MNTA FoB collaboration, is Orencia and that M834,
the second compound in the collaboration, is Humira. (Previously, I had thought
M923 was Humira and M834 was Orencia.) My changed view stems from the
acknowledgement by Rick Shea on today’s webcast that MNTA already had proof-
of-concept in hand for M923 when the BAX collaboration was inked in Dec 2001.
(In all other respects, the discussion below is the same as in #msg-81296814.)

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From MNTA’s 3Q12 CC transcript (#msg-81287940):

M923 [Orencia, IMO], is a biosimilar for a branded drug indicated for autoimmune and inflammatory diseases…and we are working towards a 2014 IND submission. Upon IND acceptance for M923 we earn both a technical milestone and an IND milestone.

…For M834 [Humira, IMO], the next payment for this product will be a licensed payment upon achieving minimum development criteria. We also expect to achieve this criteria [sic—criteria is not a singular!] some time in 2014.

…For M511 [Erbitux, IMO], which Baxter recently selected for development, if the product achieved certain minimum development criteria and Baxter formally opts in to license the product, we earn a license payment which we expect in early 2014.

With this progress [i.e. on the three compounds above], we could expect to receive a total of up to $26 million in license fees and milestones in 2014.

…There are also financial provisions in the collaboration that allow us to earn up to $15 million per product [in addition to the $26M figure above] if our clinical requirements can be reduced [i.e. if the standard clinical-trial pathway can be reduced by employing MNTA’s proprietary analytics to show a high degree of sameness, as was accomplished with generic Lovenox]. So, although we will incur the bulk of the development costs prior to or up to IND submission there are opportunities for option fees and milestone payment that will offset future cash outlays. Post-IND, Baxter is responsible for cost development.

Please see the table in #msg-70258421 for additional details.