Momenta Pharmaceuticals, Inc. Looks for Some Momentum

By Brian Orelli Markets Fool.com

Momenta Pharmaceuticals (NASDAQ: MNTA) reported first-quarter earnings on Tuesday, but given the relatively small sales, it was an update on the potential FDA approval of higher-strength Glatopa and pipeline plans that should most interest investors.

Continue Reading Below

Momenta Pharmaceuticals results: The raw numbers

Metric

Q1 2017

Q1 2016

Year-Over-Year Change

Revenue

$26.6 million

$19.9 million

34%

Income from operations

($32.6 million)

($24.6 million)

N/A

Earnings per share

($0.46)

($0.35)

N/A

Data source: Momenta Pharmaceuticals.

What happened with Momenta Pharmaceuticals this quarter?

  • The lower strength of Glatopa generated revenue of $23 million for Momenta, a 58% increase year over year. The drug has 42% of the 20-milligram U.S. market, with Teva Pharmaceuticals' (NYSE: TEVA) branded multiple sclerosis drug Copaxone taking the rest.
  • In February, Momenta and its partner Novartis' (NYSE: NVS) Sandoz division said the launch of the higher strength of Glatopa, which has substantially higher sales than the low-dose version, would be delayed because their FDA approval is being held up by an FDA warning letter given to a plant owned by Pfizer that fills the injection device.
  • The M923 collaboration with Baxalta, now wholly owned by Shire, ended early with Momenta getting a one-time payment of $51.2 million from Baxalta to fund the estimated costs through September of this year.
  • The most advanced drug in its partnership with Mylan (NASDAQ: MYL), M834 (a biosimilar of Orencia), has completed enrollment of its phase 1 trial.
  • An increase research and development spending drove the larger loss, but that's investment in the future.
  • Importantly, Momenta ended the quarter with $434 million in the bank, substantially more than the $353 million at the end of last year thanks to the Baxalta payment and a payment from CSL for their partnership to develop Fc multimer drugs including M230.

Continue Reading Below

Image source: Getty Images.

What management had to say

Craig Wheeler, Momenta's president and CEO, laid out the possibility to still get the higher-strength version of Glatopa approved this year:"Based on the work Pfizer has already done to resolve the observations and the warning letter and the effort Sandoz is putting forth to resolve the warning letter, we still believe there is potential for approval on launch of Glatopa 40 milligram in the 2017 time frame."

Momenta and Novartis' Sandoz are exploring the possibility of using another plant to fill the injection devices, but that would take a while to get approved by the FDA, as Wheeler explained:"So there is a period that would vary depending upon the current capacity and capability of the vendor and then once it's done, it's a pretty set timeline in terms of doing with stability and then the review period of the FDA, which is, on a case like this, probably a six months to eight months review."

On the potential to relicense M923, Wheeler sounded optimistic, but wasn't willing to put a timetable on it:"As we stated in the past, we have had inquiries from interested parties and are now in active discussions with multiple potential collaboration partners and evaluating different opportunities to maximize the value of this asset. As you know, deals take some time to negotiate, and we will update you as soon as we have news that we can communicate."

Looking forward

Regardless of how long it takes to finalize a partnership, Momenta is moving forward with M923, and plans to submit a marketing application in the middle of this year.

Investors will also get some clinical trial data as they wait for the potential launch of the higher-strength version of Glatopa. The aforementioned phase 1 data for M834 will be available in the second half of this year. Mylan and Momenta are already making preparations for a phase 3 trial, so presumably that means to there won't be any surprises in the phase 1 data. Data for M281, which treats antibody mediated disease, should also be available in the second half of this year.

10 stocks we like better than Momenta Pharmaceuticals
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Momenta Pharmaceuticals wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of May 1, 2017

Brian Orelli has no position in any stocks mentioned. The Motley Fool recommends Momenta Pharmaceuticals, Mylan, and Teva Pharmaceutical Industries. The Motley Fool has a disclosure policy.