Transcript Document

Company Analysis: MLNM
 Andrea Hooper
 Imke Ehlers
 Rana Sawaya
 Carlos Dedesma
Carlos
What Were Our Data
Sources?
Carlos
What are they Worth?
 Introduction
 Assets
 Some Product; Lots of Pipeline
 Agreements
Carlos
What are they Worth?
 Introduction
 Assets
 Some Product; Lots of Pipeline
 Agreements
Andrea
Introduction
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Founded 1993
Traded on Nasdaq since 1996
Currently 2,079 full-time employees
Major facilities: Cambridge, MA (HQ)
Cambridge, England
South San Francisco, CA
 Website: www.mlnm.com
Andrea
Introduction: Ample Lab Space
 Cambridge, MA: 1,040,211 sq ft building of offices and
lab space. Under lease.
 San Fran:136,000 sq ft of office and lab. Under lease.
 England: 40,000 sq ft of office and lab. Under lease.
 Constructions:
Took occupancy of a 202,000 square
feet new office lab space in MA with a lease until 2019.
Another building next to it under construction with
214,000 square feet of office and lab space with lease
til 2020. Move in Q3Q4 2K3. Also 90,000 square foot
building in England with move in Q2 2K3
Andrea
Introduction: Management’s Control
over Expenses
Total revenues
Costs and expenses:
Research and
development
Selling, general and
administrative
Carlos
2002
353,033
FYE Dec 31
2001
2000
246,216
196,269
511,210 260%
400,575 204%
152,984 78%
82,663 42%
1999
183,679
268,740 137% 159,877 81%
49,315 25%
32,896 17%
Introduction: Cheap Stock?
Carlos
MLNM
RGN
PFE
Mkt Cap (Billions)
$2.4
$0.9
$183
Price/Book
0.83
6.15
9.66
Introduction: Volatile Stock?
Carlos
MLNM
RGN
PFE
Mkt Cap (Billions)
$2.4
$0.9
$183
Price/Book
0.83
6.15
9.66
Beta
1.65
1.02
0.60
Introduction: Volatile Stock?
Carlos
Introduction: Volatile Stock?
Carlos
What are they Worth?
 Staff, Trade Name, Experience Set
 Assets
 Some Product; Lots of Pipeline
 Agreements
Carlos
Assets
 $1.8 Billion in cash
 This is enough cash to meet this year’s
operational & financing expenses
Carlos
Assets
 $1.8 Billion in cash
 This is enough cash to meet this year’s
operational & financing expenses
 What about next year?
Carlos
What are they Worth?
 Staff, Trade Name, Experience Set
 Assets
 Some Product; Lots of Pipeline
 Agreements
Rana
Some Product; Lots of Pipeline
 Cardiovascular Disease
 Product- INTEGRILIN (available)
 Pipeline- Phase I (3) / Phase II, III for Integrilin
 Cancer
 Product- VELCADE
 Pipeline- Phase I (5) / Phase II, III for Velcade
 Inflammation
 Pipeline- Phase II (1) / Phase I (1)
 Metabolic disorders
Rana
Rana
Lots of Pipeline
•
Cardiovascular Disease
• MLN519- proteosome inhibitor/ PAION Gmbh (P-II)
• MLN01- monoclonal antibody (b2 integrin)/ XOMA Ltd. (P-II)
• MLN1021- Factor Xa inhibitor (P-I)
• CAB-2- complement inhibitor / XOMA Ltd. (P-I and P-II)
•
Cancer
• MLN591RL- monoclonal antibody (prostate-PSMA)
• MLN2704- monoclonal antibody (prostate-PSMA)
• MLN576- topoisomerase inhibitor/ XENOVA (P-I and II)
• MLN518- receptor tyrosine kinase inhibitor (P-I)
• MLN944- samll molecule (solid tumor) / XENOVA (P-I and II)
•
Inflammation
• MLN02- monoclonal antibody (a4b7) (inflammatory bowel
disease) (P-II) / Genentech (completion)
• MLN1202- monoclonal antibody (rheumatoid arthritis)
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Metabolic disorders
• Obesity and diabetes
Some Product
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Cardiovascular Disease
• Product- INTEGRILIN (available)
 Cancer
• Product- VELCADE
Rana
Some Product: INTEGRILIN
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Anti-platelet agent
Platelet Glycoprotein (GP) IIb/IIa inhibitor
Compound- Eptifibatide
Cyclic heptapeptide/binds the KGD sequence on
receptor
 Highly selective for inhibiting ligand binding
 Administered as an injection, in conjunction with
plasminogen activators, oral regimens (aspirin)
 One of three anti-(GP) IIb/IIa inhibitor available
on market (concept in 70’s and 80’s)
Rana
Some Product: INTEGRILIN
 Developed/marketed by COR and ScheringPlough
 Marketed in the US, EU, and 11 more countries
 Cleared for
 management of patients with percutaneous
coronary intervention (PCI) (angioplasty/ stenting)
 acute coronary syndromes (ACS) (unstable angina/
heart attack)
 Marketed in the US, EU, and 11 more countries
 Clinical trials in progress for added indications
 Phase III- specific type of heart attack/pre-PCI
 Phase II- coronary artery bypass graft
Rana
Medically, INTEGRILIN is 2nd Best of
Three
ReoPro > Integrilin > Aggrastat
ReoPro
(Abciximab)
Molecule
Binding site
Binding affinity
Receptor specificity
FDA Approval
Clinical studies
Sale price
Rana
Integrilin
(Epifibatide)
Ab Fab
Peptide
Unknown
KGD
High
Moderate
No (sickle cell) Yes
PCI (#1)
PCI,ACS
renal,diabetic
High
Lower
Aggrastat
(Tirofiban)
Non-peptide
RGD
Moderate
Yes
ACS
INTEGRILIN Now Faces Targeted
Competition from Eli Lilly
Imke
Conclusion:
INTEGRILIN’s Sales for the next ~18
Months have Peaked
Rana
Some Product: VELCADE
 Novel drug candidate with broad applications in
treatment of cancer
 In 2002 Velcade was granted “fast-track” status
 In Jan 2003, the NDA filing was completed for relapsed
and multiple myeloma
 In Feb 2002 a MAA was submitted to the EMEA for
marketing in the European Union
Rana
VELCADE’s Possible Additional
Indications
 Phase III- APEX trial
 Patients with multiple myeloma- refractory after one or more
prior therapies
 600 patients
 Phase II- SUMMIT trial / CREST trial
 Patients with multiple myeloma- refractory after two or more
prior therapies
 Velcade (single agent) or in combination with dexamethasone
 (NDA based primarily on phase II trials)
 Phase I and II- Velcade along with other drugs
 refractory colorectal cancer
 advanced non-small lung cancer
 blood malignancies other than multiple myeloma
 solid tumors- pancreatic, lung, breast, prostate, ovarian
Rana
VELCADE’s Mode of Action
 Compound- Bortezomib for Injection
 Proteasome inhibitor
 Dipeptide boronic acid analogues that inhibit the chymotryptic
activity of the proteasome
 Acts through multiple mechanisms to arrest tumor growth, tumor
spread and angiogenesis
Rana
VELCADE’s Mode of Action
Proteasome
Inhibitor
Proteasome
• Inducing apoptosis
• Inhibiting metastasis
and angiogenesis
IkB
NF-kB
Inhibitors of apoptosis
adhesion molecules (metastasis)
(angiogenesis)
Tumor growth
Rana
VELCADE’s Competition
 No other proteasome inhibitor on the market
 BUT, the competition for the indication includes:
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Rana
Chemotherapy
Traditional therapies
Thalomid (thalidomide) (Celgene Corporation)
Competitive therapies in late-stage clinical
development
What are they Worth?
 Staff, Trade Name, Experience Set
 Assets
 Some Product; Lots of Pipeline
 Agreements
Imke
Agreements that generate revenue
 Agreements as Sources of Revenue
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Imke
Bayer
Aventis
Schering-Plough
ILEX
Genentech
Monsanto
Agreements that generate revenue
1. Bayer
 “multi-disease alliance” in finding targets for small molecule therapies and Bayer’s
development and commercialization of resulting therapies
 research part of alliance for 5yr term- completed in Oct.2003-extendable for 1yr
at Bayer’s option
 MLNM eligible to receive up to $465MM of which $387.4MM have been received
up to Dec 2002; in 2002, this generated 22% of revenues
2. Aventis
 “inflammatory disease broad agreement” from June 2000, for a 5 yr research phase
$250MM equity investment received, MLNM will receive royalty payments and
enjoy access to Aventis’ promotional infrastructure in case of
commercialization
 “technology transfer agreement” from July 2000 over 3-5yrs. May be ended July
2003
Aventis is provided rights to MLNM drug discovery technologies in exchange for
payments between $160-200MM over 3-5yrs . $97.8MM were received to
date; in 2002, this generated 12% of revenues
Imke
Agreements
that
generate
revenue
3. Schering-Plough:
 collaboration on Integrilin marketing; US profits: 50% ; international: SGP will pay
royalties
4. ILEX
 ILEX owns CAMPATH (humanized monoclonal Ab) for refractory CML. To date,
MLNM has received $60MM from ILEX related to CAMPATH.
entitled to another $40MM in 2003 and 2004 if sales in the US meet thresholds.
After 2004 entitled to further payments if sales meet thresholds in the US.
5. Genentech
collaboration for MLN 02 to target Crohn s disease from Dec.1997 to take it
through Phase II after which Genentech will take over
option to share costs/profits or receive royalties and entitled to milestone
payments
6. Monsanto
 research alliance and technology transfer agreement with Monsanto, expired at end
of its original 5yr term.
-MLNM may receive royalty payments in the future if lead target are developed into
commercial products by Monsanto
Imke
Agreements requiring payments
 Agreements as Liabilities:
 BZL Biologics LLC
 Xenova
 XOMA
Imke
Agreements requiring payments
1. BZL Biologics
 collaboration for joint dev. and commercialization of antibody-based therapeutics
targeting PSMA from April 2001:
 MLNM holds exclusive dev. and WW marketing rights to these products.
(MLN2704/591R)
 MLNM pays development and milestone and royalty payments to BZL based on
product sales.
2. Xenova
 agreement from 2001: for the dev. and exclusive North American
commercialization rights to Xenova s DNA targeting program.
 Initial payment from MLNM to Xenova $11.5MM. MLNM promised further
milestone payments and royalties
3. XOMA
 cardiovascular alliance since Nov. 2001
 provides for the development of 2MLNM biotherapeutics by XOMA
 MLNM pays milestone and royalty payments, and commercializes products after
successful Phase II
Imke
Summary & Conclusions
 Scary Things
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Cash position
Potential patent infringement
Bayer may terminate relationship this year
Monsanto may terminate relationship this year
INTEGRILIN’s market share has probably
peaked
 Positives
 VELCADE looks promising and is solely
owned by the company
 Diverse product pipeline
Carlos
Summary & Conclusions:
We Recommend a HOLD Position
 Although we like MLNM, we are
concerned with the large number of
challenges that must be met in the next
year in order to remain an on-going
concern.
 We would like to monitor the company’s
operations and report back later this year.
Carlos
Conclusion
 HOLD as we watch for certain goals to be
met,
 File FDA application for VELCADE in multiple
myeloma
 Complete enrollment for Phase III APEX
Study of VELCADE in multiple myeloma
 Initiate CABERNET trial of Integrilin in CABG
surgery
 Initiate Phase II trials of VELCADE in solid
tumors and NHL
Conclusion
 HOLD as we watch for certain goals to be
met (continued),
 Initiate trials of Integrilin in combination with
drug eluting stents
 Initiate trials of INTEGRILIN in combination
with direct thrombin inhibitor
 Phase II results of MLNM 02 in ulcerative
colities
 Initiate Phase II trial of MLNM-591 in prostate
cancer
 Enter 2-3 new molecules into clinical
development
Millennium Executive Officers
Mark J. Levin, 52
Chief Executive Officer since 1994
President since 1993
Founding CEO of Cell Genesys, Stem Cells, Tularik, Focal and Millennium
Vaughn M. Kailian, 58
Vice Chairperson since 2002
Was President, CEO of COR Therapeutics 1990-2002
Kenneth M. Bate, 52
Senior VP & Chief Financial Officer since 2002
John "Jack" B. Douglas III, 49
Senior VP and General Counsel since 1999-2000
Linda K. Pine, 51
Senior Vice President, Human Resources since 1994
Robert I. Tepper, MD, 47
President, R & D since 2002
At Millennium since 1994
Andrea
Other Members of Management
Julian Adams, PhD
Senior Vice President of Drug Development and Discovery since 1999
Used to work for LeukoSite before the merger
Responsible for discovery of VelcadeTM while at Proscript/LeukoSite
Clare Midgley
Vice President of Global Corporate Affairs since 1997
Peter Smith, PhD
Senior VP, Clinical Drug Development since 2000
Andrea
Millenium BOD
Eugene Cordes, Ph.D., Chairman of the Board, Concurrent Pharmaceuticals, Inc.
Shaun R. Coughlin, M.D., Ph.D, Director of the Cardiovascular Research Institute,
University of California, San Francisco
Ginger L. Graham, Advisor to the President and Chief Executive Officer, Guidant
Corporation
A. Grant Heidrich, III, Partner, Mayfield Fund
Charles J. Homcy, M.D., Senior Research & Development Advisor
Vaughn M. Kailian, Vice Chairperson, Millennium Pharmaceuticals, Inc.
Raju Kucherlapati, P.h.D, Scientific Director, Harvard-Partners Center for Genetics
and Genomics, Professor of Genetics, Harvard Medical School
Eric Lander, Ph.D., Director, Whitehead/MIT Center for Genome Research
Mark J. Levin, Chief Executive Officer, Millennium Pharmaceuticals, Inc.
Edward D. Miller, M.D., Dean, Johns Hopkins University School of Medicine and Chief
Executive Officer, Johns Hopkins Medicine
Norman C. Selby, Chief Executive Officer, TransForm Pharmaceuticals, Inc.
Kenneth E. Weg, Chairman, Clearview Projects, Inc. Principal, Clearview Global Venture
Andrea
Partners
Fin
Carlos