Deborah Dunsire, M.D. President and CEO. Annual Meeting of Shareholders Cambridge, MA May 4, 2006

Transcription

1 Deborah Dunsire, M.D. President and CEO Annual Meeting of Shareholders Cambridge, MA May 4, Millennium 2006 Pharmaceuticals Millennium Inc. Pharmaceuticals, Inc.

2 Agenda 2005 Key Accomplishments 2006 Financial Guidance and Goals Strategic Drivers for Profitable Growth Growth 2007 and Beyond

3 2005 Key Accomplishments

4 Millennium Today Stronger, More Focused Successful leadership transition, refined strategy in place Market-leading oncology product VELCADE Seven molecules - development pipeline Innovative oncology-focused discovery organization Focus on execution, fiscal discipline, profitable growth

5 2005 Financial Performance VELCADE U.S. net product sales GAAP net loss Non-GAAP net loss** Cash, Cash Equivalents and Marketable Securities Guidance 2005* $190M - $195M $200M - $215M $85M - $95M >$600M Results $192M $198M $87M $645M * Guidance as updated on 3 rd Quarter earnings call, October ** Difference between GAAP net loss and non-gaap net loss primarily attributed to restructuring and amortization.

6 2005 Financial Performance ($M) Revenues 25% $448 $558 ($M) Expenses $197 $403 13% $181 $342 ($M) Non-GAAP Net Loss $181 52% $ R&D SG&A

7 2006 Financial Guidance and Goals

8 2006 Financial Guidance* Revenue VELCADE U.S. net product sales Royalty revenue Non-GAAP R&D and SG&A** Non-GAAP net income*** GAAP net loss Stock based compensation**** Amortization Restructuring Cash, Cash Equivalents and Marketable Securities $225M $250M $115M $125M ~$425M Up to $5M $95M $115M $40M $50M ~$34M $25M $30M >$500M * The Company typically updates its financial guidance on its quarterly earnings call. During the first quarter 2006 earnings call on April 27, 2006, we confirmed the guidance we set forth at the start of the year at the JPMorgan Conference, and we have not publicly updated the guidance since then. ** The Company adopted Statement of Financial Accounting Standards No. 123R (SFAS 123R) as of January 1, 2006 and now records stock-based compensation in its statement of operations in accordance with GAAP. Although this expense is a significant ongoing expense affecting the Company's results of operations, the Company excludes this charge from its non-gaap net income/(loss) because: (1) the Company s management excludes this expense from the Company's budget and planning process to assist in the allocation of resources in the Company s ongoing portfolio prioritization efforts, (2) the Company believes that excluding this expense could be helpful in comparing the Company s financial results to previous periods because stockbased compensation charges are excluded in the various operating expense categories and (3) as a result of varying available valuation methodologies, subjective assumptions and the variety of award types, the Company believes that excluding stock-based compensation may enable useful comparisons of the Company s operating results to its competitors. Non-GAAP net income/(loss) and other non-gaap financial measures disclosed by the Company should not be considered in isolation or as a substitute for GAAP. *** Difference between GAAP net loss and non-gaap net income primarily attributed to stock based compensation, amortization and restructuring. **** Related to stock options, restricted stock, and employee stock purchase plan.

9 1Q 2006 Financial Performance Revenue VELCADE U.S net product sales Strategic Alliances revenue Royalty revenue Expenses Non-GAAP R&D* Non-GAAP SG&A* Non-GAAP net income** GAAP net loss 1Q 06 Results $53M $39M $30M $76M $31M $1M $21M % change 1Q 05 19% 7% NA (11%) (39%) 104% 43% * The Company adopted Statement of Financial Accounting Standards No. 123R (SFAS 123R) as of January 1, 2006 and now records stock-based compensation in its statement of operations in accordance with GAAP. Although this expense is a significant ongoing expense affecting the Company's results of operations, the Company excludes this charge from its non-gaap net income/(loss) because: (1) the Company s management excludes this expense from the Company's budget and planning process to assist in the allocation of resources in the Company s ongoing portfolio prioritization efforts, (2) the Company believes that excluding this expense could be helpful in comparing the Company s financial results to previous periods because stock-based compensation charges are excluded in the various operating expense categories and (3) as a result of varying available valuation methodologies, subjective assumptions and the variety of award types, the Company believes that excluding stock-based compensation may enable useful comparisons of the Company s operating results to its competitors. Non-GAAP net income/(loss) and other non-gaap financial measures disclosed by the Company should not be considered in isolation or as a substitute for GAAP. **Difference between GAAP net loss and non-gaap net income primarily attributed to stock based-compensation, amortization and restructuring.

10 2006 Goals Strategic drivers VELCADE Pipeline Strategic Business Relationships Status Achieve guidance File snda NHL mantle cell relapsed Continue accelerating highest priority Goals 2006 Progress trials, support publications/ compendia listing multiple myeloma front line Initiate phase III NHL follicular relapsed programs Progress at least 2 molecules to decision points Advance 2 new molecular entities to development candidate status Evaluate opportunities support long-term growth = on track = accomplished

11 VELCADE Overview

12 Growth Opportunity $ >$1B peak worldwide opportunity NSCLC NHL follicular NHL mantle cell Multiple myeloma front line Market leader multiple myeloma relapsed 2006

13 % of patients Goal of Therapy Survival Multiple Myeloma Relapsed VELCADE dexamethasone APEX phase III Median 30-month survival 6-month advantage over dex* >62% of dex arm crossed over to VELCADE ~ p = Time (days) *dex = dexamethasone Richardson P, et al. Blood 2005, 2547

14 Comparison of Single-Agent Activity Trial Evaluable Patients ORR (CR + PR) CR / ncr Median TTP Survival Most Common Side Effects VELCADE Phase III APEX* % 16% 6.2 months 30 months GI events Peripheral neuropathy Thrombocytopenia lenalidomide Phase II Single-agent** % Not reported 5.2 months TBD Respiratory infection Neutropenia Thrombocytopenia *Richardson P, et al. Blood 2005, 2547 ** Richardson P, et al. Blood 2005, 1565

15 Building Blocks of Growth Multiple Myeloma Relapsed Combinability* Benefit bone Benefit broad range of patients Retreatment / maintenance Compliance 8 cycles Well-characterized safety profile Single-agent survival advantage *As seen in clinical trials

16 Importance of Compliance Timing of 1 st response 54% after cycle 2 29% on / after cycle 4 Maximum M-protein reduction Cycle 4-66% of patients Cycle 6-37% of patients Cycle 8-20% of patients Time to Maximum M-protein Reduction Richardson et al. Blood 2005, 2547

17 Evolving Treatment Landscape - Raising the Bar of Care Market share treated patients* 100% 80% 60% 40% 20% 0% * Based on Company audit, October 2005 Front line Second line Third line VELCADEbased therapies Other new therapies Older therapies

18 ASH 2005 Multiple Myeloma Front Line Efficacy consistently enhanced Some of the highest recorded response rates* Trial design Investigator + MP** Mateos single agent / + dex Jagannath + thal*** / dex Wang Evaluable patients ORR 86% 90% 92% CR / ncr 43% 19% 18% (CR only) Ability to transplant NA 23/23 35/35 * Toxicities similar to those seen in previous trials Mateos V, et al. Blood 2005, 786 ** MP = melphalan prednisone Jagannath S, et al. Blood 2005, 783 *** thal = thalidomide Wang M, et al. Blood 2005, 784

19 Responses Compared to Transplantation Multiple Myeloma Front Line VELCADE + MP showed transplant-like responses in elderly patients >50% VELCADE CR s molecular remission VELCADE + MP* Transplant** MP ORR 86% 80-90% 53% CR 30% (CR / ncr = 43%) 25-45% 2% * Mateos V, et al. ASH 2005, 786 ** Published results: Barlogi, Blood 1997; 89:789; Lenhoff, Blood 2000; 95:7; Attal, N Eng J Med 1996; 335:91; Fermand, Blood 1998: 92:3131; Blade, Blood 2001; 98:815a

20 Registration Trials Multiple Myeloma Front Line Treatment paradigm Design Phase III Registration-Enabling Trials VISTA Nontransplant MP vs. VELCADE + MP HOVON Transplant VAD vs. VELCADE + AD IFM Transplant VAD vs. VELCADE + D Target patient #

21 NHL Mantle Cell Relapsed snda filing 2H 06 Phase II single-agent Interim results (n=48) ORR: 42% CR: 8% Survival: not yet reached, >10.5 months Side effects manageable Trial completed (n=155) Final data 1H 06

22 NHL Follicular Relapsed Phase III rituximab +/- VELCADE initiated 2Q patients Primary endpoint progression-free survival Phase II + rituximab Interim results (n=74) ORR: >50% Side effects manageable Equal efficacy, improved safety weekly dosing Patient enrollment completed (n=81) Final data 1H 06 Goy A, et al. Blood 2005, 17

23 NSCLC: Broad Strategy Treatment Front line Second line BAC, adeno-bac features Next steps Evaluating phase III trial designs SWOG phase II 11-month survival data; safety profile manageable Final data 1H 06 Registration strategy in place Randomized trials ongoing Phase II + pemetrexed Phase II + erlotinib Phase II ongoing Molecular stratification (EGF-R, KRAS) Interim data 1H 07

24 Clinical Plan Summary 169 Trials Multiple myeloma Other solid tumors 41 trials front line 22 trials Multiple myeloma relapsed 14 trials NSCLC 19 trials Other hematological 15 trials NHL relapsed 40 trials NHL front line 18 trials

25 Milestones snda filing NHL mantle cell relapsed Trial starts NSCLC second line phase II pemetrexed NHL follicular relapsed phase III rituximab +/- VELCADE Multiple myeloma front line phase II + lenalidomide, dexamethasone (IIS) Data presentations NHL mantle cell relapsed phase II NHL follicular relapsed phase II NSCLC front line (SWOG) phase II Multiple myeloma retreatment phase IV Multiple myeloma front line phase III 1H 06 2H 06

26 Pipeline

27 Pipeline Commercial programs Millennium-discovered molecules VELCADE (multiple myeloma) PC Phase I Phase II Phase III Reg. Market (follicular NHL) Oncology MLN518 (mantle cell NHL) (NSCLC) (other tumors) (AML) MLN8054 (advanced malignancies) MLN02 (UC, Crohn s) Inflammation MLN1202 MLN3897 MLN3701 MLN0415 (MS) (atherosclerosis ) (RA, others) (RA, others) (RA, MS, COPD)

28 2005 Advancements Trial initiations Phase I Phase I/II Phase II MLN3701, MLN8054 MLN518 AML front line MLN1202 MS, atherosclerosis New development candidate MLN th Millennium-discovered molecule

29 MLN02 α4β7 Antibody Gut-Specific Lymphocytic Targeting Agent Positive phase II results UC, Crohn s Differentiated from other integrins Commercially scalable cell line selected Phase I 1H 07 Bridging study Next step: pivotal trial Dose 0.5 mg/kg 2.0 mg/kg Placebo MLN02 Phase II Trial, UC Day Remissions 33% 32% 14% p = 0.03 Serious adverse events: 8% (MLN02) vs. 5% (placebo) Treatment of Ulcerative Colitis with a Humanized Antibody to the α4β7 Integrin June 16, 2005

30 MLN518 RTK Inhibitor (FLT-3, PDGF-R, c-kit) Single agent activity AML relapsed Activity: 7 / 25 patients CRp: 1 / 25 Manageable safety Broad strategy Phase I/II AML front line Exploration in other areas PDGF-R Prostate, glioblastoma, renal NCI Patient 20 % Reduction in Bone Marrow Blasts Study Day

31 MLN8054 Oral Aurora A Kinase Inhibitor Benzazepine core scaffold Phase I advanced malignancies ongoing Preclinical data presented at AACR Potent, selective to Aurora A kinase Significantly inhibits tumor growth in a variety of cancers

32 Inflammation Candidates Molecule MLN1202 (CCR2 antibody) MLN3897 (CCR1 inhibitor) MLN3701 (CCR1 inhibitor) MLN0415 (IKK β inhibitor) Status Phase IIa trials MS, atherosclerosis ongoing Phase IIa scleroderma 2H 06 Go / no-go decision: atherosclerosis 1H 06 Phase II RA 2H 06 Phase I ongoing Phase I 2H 06

33 Innovative Growth Engine Discovery Focus on proprietary pipeline past 5 years 4 NMEs past 2 years Capability / goal: 2 NMEs / year Biology Protein homeostasis Signal transduction Cell surface targets Small molecules Biologics Naked Conjugated

34 Growth 2007 and Beyond

35 Growth 2007 and Beyond VELCADE Pipeline Strategic business relationships Key growth driver Multiple myeloma front line, NHL, NSCLC >$1B worldwide peak opportunity Innovative therapies Phase III starts MLN02, MLN518 2 new molecular entities / year Collaborations In-licensing oncology Focus on execution, fiscal discipline, profitable growth

36 Breakthrough science. Breakthrough medicine ṢM