On today’s 1Q14 CC, MNTA said that any cash it obtains from its 50/50 profit share with NVS on generic Copaxone will not be accounted for as revenue if the product launch is “at risk”—i.e. if it is subject to possible damages from the Copaxone patent litigation under review by the USSC; rather, cash that MNTA receives stemming from the profit share on Copaxone will flow into a reserve account on MNTA’s balance sheet for possible payment of legal damages.
From a practical standpoint, this means that MNTA will not touch the cash in the reserve account for general operating purposes, and hence the ATM facility was desirable to enhance the company’s flexibility in its use of cash while the Copaxone patent case remains under review.
Of course, the ATM facility will also shore up MNTA’s liquidity if FDA approval of Copaxone does not come in the near future.
As of 3/31/14, MNTA had $224.6M of cash (including $20.7M of restricted cash). Excluding cash from sales of Copaxone and FoB milestone payments from BAX, MNTA’s cash burn for the last 9 months of 2014 is expected to be about $84M (according to today’s CC). Subtracting $84M from $224.6 and adding the $19M in milestone payments MNTA expects to receive from BAX during 2014 gives a projected year-end cash balance of about $180M, excluding any cash from Copaxone sales and any use of the ATM facility.
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