10/16/03 Analyst Day notes
Mark Levin
more than 250 salespeople for V and I
V indications- - mm, nhl, solid tumors, ra, stroke
I will be $ 500 m + product; will begin new trial for early use acs
3 key pathways where mlnm has expertise: proteasome inhibition; cell trafficking; cell signaling - - want to leverage these skills
crucial to p 1 / p 2 portfolio mgmt. is using pathways, imaging and biomarkers to rule in/ out early stage candidates
p 2/ p 3- - need operational excellence
there will be more proteasome products
see being at level of top 2 biotech companies by 2011
10 molecules in clinic- - 2 approved products; 8 candidates
Bob Tepper
commercial products focus: V - - cancer, ra, stroke; I - - early acs
pipeline now divided into high priority:
2704 - - prostate
944 - - solid tumors
518 - - aml, glioblastoma; studying ITD biomarker found in 30% of aml patients
1202 - - ra, ms, restenosis
and lower priority:
02 - - ibd
591 - - prostate
519 - - various proteasome inhibitors
576 - - solid tumors
differentiating approach: wants to use molecular pathway expertise on unprecedented targets with precedented pathways
areas of expertise to be leveraged, i.e. common mechanisms across multiple therapeutic areas:
chemokine receptors - - 1202 + preclinical
rtks - - 518 + preclinical
proteasome - - V, 519 + preclinical
stks - - preclinical
integrins - - I, 02
has over 20 ongoing discovery programs that will generate 2 development candidates each year into clinic + will expand indications for both approved drugs and existing clinical candidates
making go/no go decisions earlier based on proof of concept
90% of r&d projects use genomic strategies
bio-marker driven clinical development
1st q & a
1. are you aware of a proteasome inhibitor being tested in hiv and do you see potential for V in hiv? - - has existing effort with V in infectious diseases
2. how is morale after layoff? - - agile, resilient, upfront with employees; will be using a revitalization team for a year
3. 90% of pipeline came from acquisitions. Will there be more internally generated molecules in next 10 years? - - over next several years, there will be more genomics –based targets; took many years to set up infrastructure; will be generating small molecules in chemokine receptor areas in next few years
4. why did 2704 leapfrog 591? - - based on pk and tolerability
5. you will need manufacturing capability for some of your high priority candidates. will you build or partner? - - happy with contractors; will not build; will look for partners with commercial and manufacturing capabilities in ex US market deal while retaining US rights
6. when does I patent expire? - - 2014
7. what is your role in personalized medicine? - - biomarkers and pathways; also, fda is very interested in personalized medicine; mlnm has been brought in to teach fda about them; fda wants to know how they should be regulated; fda wants personalized medicine tests for all drugs
8. what’s been successful in genomics? - - known pathways and streamlines entire process
9. is ccr2 in ra an example of an unprecedented target with a precedented pathway? - - yes; but not sure if ra is right disease; others to be studied include ms and restenosis
10. how has 2704 safety been demonstrated? - - few adverse events
11. how do you know that the 2704 conjugate isn’t dislodged prior to getting to target tissue? - - 4 pk measures
12. a question was raised about 2704 and seattle genetics, but the end of the question and the answer was cut off
13. a question was raised about the economics of using genomics for more efficient trials vs. smaller markets, but the answer was cut off
14. dna status of 02? - - had an efficacy signal; still discussing
15. why did psma and ccr2 move so quickly in clinic? - - good results
16. why did you terminate drugs that you had recently put in clinic? - - proud of that
David Schenkein - - V
EU regulatory process on schedule; technology transfer with OBI product supply established in EU; global filing plan established for ROW
Accrued p 3 apex trial - - 600 patients; 340 in crossover trial
Mlnm –sponsored p 2 studies:
Mantel cell lymphoma- - 6% of all lymphomas: - - V alone
Nsclc - - V alone or V + docetaxel
Colorectal - - V alone or V + irinotecan
Has seen activity in follicular and sll/cll lymphomas
P 1 ovarian cancer - - V + carboplatin - - 67% response rate
Data to be presented:
Ash 2003 - - mm combo, mm frontline,mm duration, nhl, safety updates
Asco 2004 - -all of the above + solid tumors p1 and p 2
Ash 2004 - - same as ash 2003
V marketing: consistent across geographic regions;reimbursement process on track; has medicare pass-through status for outpatient use
Bob Terifay - - I
How to expand I use in cath lab? - - questions Angiomax’s replace 2 study results, e.g. excluded all high-risk patients, encouraged inappropriate uses of heparin and overly high doses of I to elderly
Says A has had little impact on gp iib-iiia inhibitor market
gp inhibitors grew since intro of A
A has 9% share, which includes combo with gp inhibitors
Starting 2 competitive studies:
Protect - - a high risk angioplasty study; I with heparin vs A; already initiated
Remove - - I vs. I with heparin in elective PCI; to start in early ‘04
Starting 2 new trials in new settings:
Titan -- I for stemi; early treatment vs. at time of primary angioplasty; already initiated
Event - - bare metal or drug-eluting stents with and without gp inhibitors; hopes to show that gp inhibitors are still necessary to prevent thrombotic events regardless as to type of device used; to start in early ‘04
Grow I in early use setting by educating in acc/aha guidelines
Planning new p 3 early non ste acs - - 1.3 m patient potential; in emergency room for prevention of early MI in combo with plavix, lovonex and stents; to start in early ‘04
Stemi advance MI market is shrinking, that’s why trial was cancelled
Ken Bate
Assumptions:
Next 3 years: based on current labels on I and V; existing products and existing collaborations; all that we need to do is execute
Growth beyond 2006: pipeline + new indications of existing products
No plans to go to capital markets
Likeliest revenue contributors in 2006-2010: 1202, 2704, 518, 944
20% annual r&d expense reduction = ~ 100 m, fully effective by 2nd ½ 2004
10-20 % sg&a annual increase, which includes I salesforce increase
more than 800 m cash entering 2004
capex reduced 50% after restructuring
restructuring charges: 225-250 M through 2005; 1/3 noncash, 2/3 cash over 3 years
get 60% I in US
I inventories coming down
I price increase at end of 3rd q
2nd q&a
1. any measurement of V off-label use? - - don’t collect data like that
2. duration of V treatment? - - too early to tell
3. I inventory levels? - - market is flat to slightly growing; expects to end year with greater than 300 m of I revenue with about 1.2-1.3 months inventory; 4th q started weak
4. what will be effect of drug-eluting stents? - - does not foresee negative impact on gp inhibitors; expects that if stents are used in cath lab and angioplasty, then gp inhibitors will grow; will have better data in 6-8 months
5. how is V trial for colorectal cancer accruing? - - on target at 20 US sites
6. why did apex accrue rapidly? - - as expected
7. will crusade data achieve ss? - - after risk-adjustment with more patients, they expect it will
8. how big will acs study be? - - it will be large; in final design phase; will be realistic and well-powered
9. when will you update on 4 V signals? - - end of year
10. any residual value in metabolic program? - - no, all stuff went to abbott
11. update on V front line study? - - some trials are ongoing; 2 q ’05 fda commitment
12. update on maintenance trial? - - some people on 23 cycles; apex trial has some maintenance; apex data analysis early ‘05
13. are there mantel cell databases you will use? - - yes
14. barry greene’s departure? - - he was project leader and had limited role once V was approved; david is strategic V person now
15. what are risk factors for 2006 profitability ? - - V sales
16. what was I price increase? - - 5.2%; both competitors had taken price increases recently
17. 518 only effective with mutation? - - enrolling patients with and without mutation
18. when will we see 518 data? - - asco ’04 or ash ‘04
19. anecdotal data on V launch vis-a-vis T ? - - no direct answer
20. what % of I patients are treated at best practices hospitals? - - no direct answer
21. when p 1 data for 944? - - 1 year
22. 944 for what solid tumors? - - too early to tell
23. are competitors' discounts for large buyers of I causing you to do likewise? - - reopro gives 0-10% discount
24. how will 70 I salespeople cover all clinical cardiologists? - - 80/20 rule
25. do you assume that V will work in solid tumors beyond 2006? - - not specifically
26. how much impact did new I salesforce make on 3 q revenue? - - a direct effect
27. jnj payments booked as revenue? - - yes
28. is there pent-up demand for V? - - no direct answer
29. why did you go into larger colorectal cancer trial? - - strong preclinical models and (i) to establish V single agent activity and (ii) followup of p 1 safety trial with irinatecan
30. won’t there be a large cost for 5 new I trials? - - the acs trial would be large and expensive; the other 4 would be much less expensive; both expenditures are reimbursed in part by partners
31. I spend vs V spend? - - no direct answer; V has 40 investigator-initiated trials now and will likely go to 80
32. EU approval update? - - norm is beyond a year; expecting 1st ½ ‘04
33. 518-like competitors produced equivocal data. Why are you so aggressive? - - 518 is different from competitors
34. I inventories vary based on price increases. Are you trying to do something about that? - - increase demand
35. with uncertainty at sgp, will you get I for yourself? - - sgp says that I is one of their largest opportunities
36. I progress in europe by sgp? - - no direct answer
37. if get success in acs trial, can a 2% improvement in mortality be cost-justified? - - trying to reach 900,000 patients who go to cath lab; hospital administrators like gp inhibitors because it reduces the length of stay, a key financial element for them
Impressions
Great quarter. Faster than expected r&d savings; greater V and I revenue than expected; I share increased from 68% to 71%. The I marketing guy has both a keen strategic sense and tactical flair and has reinvigorated I program; great presentation and explanation on portfolio management criteria , as well as on how they will leverage their skills; ken bate certainly has instilled a strong sense of financial discipline; short-term, intermediate and longer-term plans make more sense. Looking good !
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