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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

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company analysis mlnm
Company Analysis: MLNM
  • Andrea Hooper
  • Imke Ehlers
  • Rana Sawaya
  • Carlos Dedesma

Carlos

what are they worth
What are they Worth?
  • Introduction
  • Assets
  • Some Product; Lots of Pipeline
  • Agreements

Carlos

what are they worth4
What are they Worth?
  • Introduction
  • Assets
  • Some Product; Lots of Pipeline
  • Agreements

Andrea

slide5

Introduction

  • 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

slide6

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

slide8

Introduction: Cheap Stock?

MLNM RGN PFE

Mkt Cap (Billions) $2.4 $0.9 $183

Price/Book  0.83  6.15 9.66

Carlos

slide9

Introduction: Volatile Stock?

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

Carlos

what are they worth12
What are they Worth?
  • Staff, Trade Name, Experience Set
  • Assets
  • Some Product; Lots of Pipeline
  • Agreements

Carlos

assets
Assets
  • $1.8 Billion in cash
  • This is enough cash to meet this year’s operational & financing expenses

Carlos

assets14
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 worth15
What are they Worth?
  • Staff, Trade Name, Experience Set
  • Assets
  • Some Product; Lots of Pipeline
  • Agreements

Rana

some product lots of pipeline
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

lots of pipeline
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)
  • Metabolic disorders
      • Obesity and diabetes

Rana

some product
Some Product
  • Cardiovascular Disease
      • Product- INTEGRILIN (available)
  • Cancer
      • Product- VELCADE

Rana

some product integrilin
Some Product: INTEGRILIN
  • 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 integrilin20
Some Product: INTEGRILIN
  • Developed/marketed by COR and Schering-Plough
  • 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 2 nd best of three reopro integrilin aggrastat
Medically, INTEGRILIN is 2nd Best of ThreeReoPro > Integrilin > Aggrastat

ReoPro Integrilin Aggrastat

(Abciximab) (Epifibatide) (Tirofiban)

Molecule Ab Fab Peptide Non-peptide

Binding site Unknown KGD RGD

Binding affinity HighModerate Moderate

Receptor specificity No (sickle cell)YesYes

FDA Approval PCI (#1) PCI,ACS ACS

Clinical studies renal,diabetic

Sale price HighLower

Rana

slide24

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

slide25

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
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 action27

Proteasome

Inhibitor

  • Inducing apoptosis
  • Inhibiting metastasis
  • and angiogenesis
VELCADE’s Mode of Action

Proteasome

IkB

NF-kB

Inhibitors of apoptosis adhesion molecules (metastasis)

(angiogenesis)

Tumor growth

Rana

velcade s competition
VELCADE’s Competition
  • No other proteasome inhibitor on the market
  • BUT, the competition for the indication includes:
    • Chemotherapy
    • Traditional therapies
    • Thalomid (thalidomide) (Celgene Corporation)
    • Competitive therapies in late-stage clinical development

Rana

what are they worth29
What are they Worth?
  • Staff, Trade Name, Experience Set
  • Assets
  • Some Product; Lots of Pipeline
  • Agreements

Imke

agreements that generate revenue
Agreements that generate revenue
  • Agreements as Sources of Revenue
    • Bayer
    • Aventis
    • Schering-Plough
    • ILEX
    • Genentech
    • Monsanto

Imke

agreements that generate revenue31
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 revenue32
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 requiring payments
  • Agreements as Liabilities:
    • BZL Biologics LLC
    • Xenova
    • XOMA

Imke

slide34

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
Summary & Conclusions
  • Scary Things
    • 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
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
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
conclusion38
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
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
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
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 Partners

Andrea

slide42

Fin

Carlos