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Biotech / Medical : Millennium Pharmaceuticals, Inc. (MLNM) -- Ignore unavailable to you. Want to Upgrade?

To: Icebrg who wrote (1712)	7/11/2003 4:53:42 PM
From: Biomaven	Respond to of 3044

Is it the actual use of the drug, which should be a relatively good indicator, or shipments to distributors, which holds less of a predicative value. I have to believe it is distributor shipments, which can indeed be very misleading in the early stages because of pipeline fill. (And also misleading if there is a price increase in the offing or if a company is trying to stuff the channel like BMY did). Peter

To: Icebrg who wrote (1712)	7/11/2003 7:42:18 PM
From: Miljenko Zuanic	Read Replies (2) \| Respond to of 3044

My projection (optimistic) is $6 M for 2Q, and ~$110M for year. I count on off-label usage and expansion for end-stage cancers, as none drug work while Velcade may. Miljenko

To: Icebrg who wrote (1712)	7/13/2003 1:39:22 PM
From: Icebrg	Read Replies (1) \| Respond to of 3044

The multi-tasking Velcade deal By Kathryn Calkins Senior Writer [Some comments from BioCentury. It is interesting to see Greene confirming that the deal was structured in a way that would make it easier for Millennium to reach its profitability targets. Not that I think there is anything wrong with the structure of the deal. In the long run MLNM should be able to extract more money from J&J with this type of set-up compared to a more traditional structure with a huge initial payment. Provided Velcade lives up to its promises. Erik] Investors quickly walked away from Millennium Pharmaceuticals Inc.’s deal to partner ex-U.S. rights to Velcade to the Ortho Biotech unit of Johnson & Johnson. Indeed, the upside in last week’s deal is largely tied to the success of the proteasome inhibitor in follow-on cancer indications to its already approved use in multiple myeloma. The deal provides a modest $15 million upfront, with the bulk of its $520 million in development and sales milestones tied to success in cancers other than MM. But while investors pushed the stock down by 11% to $14 on Tuesday following the announcement, MLMN was arguing that the deal structure provides P&L leverage, while allowing the company to retain all of the upside in the U.S. In particular, according to MLMN, the deal structure specifically helps the company meet its stated annual operating loss goals on its way to reaching breakeven in 2006. In addition to the upfront payment, MLNM stands to receive up to $125 million in milestones related to approvals and sales of Velcade in MM outside the U.S. MLNM also will receive a double-digit royalty that Chairman and CEO Mark Levin said in a conference call on Monday will be “what you would expect for a product approved in the U.S. and close to approval in Europe.” For other indications, MLNM could receive up to $330 million in clinical and regulatory milestones. The company also is eligible for up to $65 million in total sales milestones outside the U.S. Additionally, Ortho will reimburse MLNM for 40% of the total development costs for Velcade through 2005 and 45% thereafter. At the American Society of Clinical Oncology meeting in June, MLNM presented results from several Phase II trials of Velcade in non-Hodgkin’s lymphoma and renal cell carcinoma, among other indications. Barry Greene, general manager of oncology at MLNM, told BioCentury that the Ortho deal meets the company’s two most important criteria. It provides for broad clinical development of Velcade globally by committing Ortho to pay for 40% of MLNM’s multiple-indication plan. Second, “we still own the U.S., which has the greatest revenue potential for the drug. Every dollar we earn there, we keep,” he said. Greene said the milestones are designed to help the company meet its operating loss goals in each year through 2006, when MLNM hopes to reach profitability. On the way, the company expects operating losses of $300 million this year, less than $200 million in 2004 and less than $100 million in 2005. To meet the goals, Greene noted, “it was in our interest to make the milestones hit heavily for the next three years and continue beyond that timeframe.” Deals structured with large upfront components would not provide the necessary P&L benefit, because upfront money must be amortized over the life of the deal. In contrast, MLNM expects to realize the milestones as revenue from partnerships. Greene would not provide specific guidance on when MLNM expects to achieve clinical and regulatory milestones. However, $125 million is tied to further success with Velcade in MM, for which the product is under review in Europe. A Phase III trial also is comparing Velcade with high dose dexamethasone in MM patients who have failed one-three prior therapies, “a less sick population than the Phase II trial” on which accelerated approval was based, said Greene. He expects the trial to complete accrual by year end, with data at the end of 2004 or early in 2005. Last week, MLNM (Cambridge, Mass.) began a single arm Phase II trial of Velcade in 152 patients with relapsed or refractory mantle cell lymphoma who have received one or two prior lines of therapy. Greene said the trial is part of a larger clinical plan for non-Hodgkin’s lymphoma and, although it is intended to lead to a Phase III trial in the indication, could potentially support accelerated approval. Two Phase II trials are ongoing in lung and colon cancer, and Greene expects to present data from those trials at next year’s ASCO meeting. Greene noted that there was a dearth of comparable biotech deals. “It’s pretty unique,” he said. “What most major companies want is U.S. rights, so there are few large, ex-U.S. deals out there.” He mentioned Merck KGaA’s 1998 acquisition of ex-North American rights to Erbitux cetuximab from ImClone Systems Inc. (IMCLE, New York, N.Y.). Merck (FSE:MRK, Darmstadt, Germany) agreed to pay IMCLE $30 million in upfront fees and early milestones plus $30 million in late-stage milestones, a $30 million line of credit to build a manufacturing facility, and royalties. At the time Erbitux was about to enter Phase III testing in head and neck cancer.