- brief overview then free-flowing q&a session
- net free cash flow has been $50-60m per quarter or $1-1.25 per share. We have no plans for fundraising
- How economics are affected by # of generic entrants?...we previously thought one would come, hasn't materialized yet [of course soon after this Amphstar and Watson $WPI received approval] If sole generic, get 45% profit share. if competitor is launched, then get low double digit royalty on sales. Teva publicly implied that deficiencies were minor and could be addressed quickly but they won't comment anymore, they have said nothing since February
- yesterday in court in copaxone patent trial, it was admitted that Sandoz had possibly received deficiency letter re copaxone manufacturing -effect on application and timeline? I wasn't there, but my understanidng was that the testimony in question was from Mylan and therefore referred to their ANDA and receiving questions from FDA. But in a complex case like this, getting questions from FDA and responding is normal.
- framework for patent litigation? why split trial and then not issue inequitable conduct decision? The judge didn't give an explicit reason. Our feeling is that it was primarily for scheduling reasons...the court had time available. We continue to see the whole thing as one integrated case and are not surprised by lack of separate ruling
- what is your expectation for Copaxone FDA approval? We believe strongly that we will be apporved as interchangeable generic in ANDA pathway. The timeframe for review is lengthy. some is FDA-specific due to workload expanding without more staff. And this ANDA is complex (mentioned the chemistry aspects specifically)
- any more communication with Office of Generic Drugs (OGD)? What was most recent back and forth? can you use pattern of questions and process for lovenox to get a sense of how far along copaxone ANDA is? Lovenox experience gives us a sense of their approach to these types of complex drugs. But is less revealing as to timeframe for copaxone. We interact regularly and is very positive. We believe we have a good understanding of their view - the issues that they think are important, with respect to criteria for meeting sameness.
- Did lovenox experience inform copaxone package or supplemental materials? Cause you to do something different? Generally not. lovenox had a subsequent requirement for immunogenicity and specific issues related to chinese heparin that added time on the backend of process.
- Is immunogenicity an issue for copaxone? to the extent it applies to copaxone, it would be very diffent from lovenox which had class issues for heparin-based products which was a large part of the FDA's concern and does not apply to copaxone
- On the last CC you/Sandoz stated you were at 45-50% market, and at capacity...seems to be less interest to increase capacity to push market share...why is it more prudent to stay at current share vs undertaking a second push to boost capacity? we do have capacity constraint, but this is not from heparin sourcing in china- we have 4 supplies. Further processing occurs at Sandoz facility (they have increased their throughput capacity from 35 to 50% of market). Now to increase capacity further, we would have to take down production for some period of time. So you would have to be very very sure that you could capture those lost sales. We really can't be that sure about competitors and market share. He wouldn't say how long the required downtime would be or why it would be necessary.
- If teva is rejected and no longer looming? change thoughts on expansion or is maintaining current production level also related to market dynamics? There are number of factors. The premise is highly unlikely.
- Why not build another facility? it's not quite that simple. Have to balance time, duration, cost - it is relatively uncertain whether it would generate an appropriate ROI
- 50% of market with duopoly doesn't seem out of line? is there more market share to gain? Going back to IPO roadshow, we said we would get only generic due to technology [so much for that assertion...]...and gave example of stable pricing in 50/50 duopoly market with one generic (propofol)
- review one year anniversary change in contract terms? We received $10m milestone and royalty rate upon launch of competitor was increased. Rate has two tiers, now moves up to low doible digits.
- IP - teva litigation re enoxaparin? no update. markman hearing december 2011
- are these patents enough to keep them off the market if they get approval? trhat is their decision..what is likliehood of losiojgn case and having to pay damages. we hink these are valid and likely to be infringed.
- what will you do with accumulated cash? as CFO, I look at worst case on revenue side...another approval would put us in cash burn situation until generic copaxone is on market (worst case 2014) plus cash cushion. Above that we can reinvest in business or somehow return cash to shareholders. That is something we consider and it is on the table. FOB is major opportunity, an area we consider investing some of our own cash
- if teva receives approval...is it launch that changes finances to royalty? yes, launch.
- What if they launch at risk and then lose case? do you revert back to a profit split? There is no provision for that reversion in Sandoz agreement- it did not envision such patents. We would stay as royalty, and any additional profit recovery would be from Teva
- FOBs-discuss? everyone else has intention of doing biosimilars. We are after biogenerics. [nothing else new in discussion]
- sandoz plans to be huge in biosimilars...how can they do that without what you have? Sandoz, Teva, Merck, Pfizer, Amgen, Biogen all announced intentions in the space. How are those products going to be differentiated in the marketplace? what is the difference between one biosimilar and another?
- But Sandoz knows MNTA and technology well already...? There always an arguument for a biotech company to diversify our partnerships. If we partner with them for FOB too, they basically own our whole business. As CFO i would prefer to diversify. [The diversification argument is weak in this context. But I agree that if NVS is the eventual FOB partner, it would make much more sense to simply buyout MNTA]