Continue Reading Below
After the company reported third-quarter financials and updated investors on the progress of its biosimilars pipeline, shares of Momenta Pharmaceuticals (NASDAQ: MNTA) lost 12.6% of their value earlier today.
Momenta Pharmaceuticals recorded $10.9 million in product revenue from sales of it and Sandoz's Glatopa 20 mg, a sharp decline from the $23.3 million reported in Q3 2016. Glatopa is a biosimilar to 20 mg Copaxone, a blockbuster multiple sclerosis drug.
The 53% decrease in Glatopa revenues was due mostly to price discounts associated with Medicaid and inventory price adjustments tied to the FDA's approval of Mylan's (NASDAQ: MYL) 20 mg and 40 mg Copaxone biosimilar in early October. Additionally, a $10 million commercial milestone payment made by Sandoz to Momenta was subtracted from Glatopa's net profit prior to calculating Momenta's 50% share of Glatopa's profit.
The company also updated investors on its pipeline progress. It's still awaiting a decision from the FDA on its 40 mg long-lasting Copaxone, but it hopes to hear from the regulator either this quarter or early in 2018.
Continue Reading Below
It plans on submitting its Humira biosimilar for approval soon; however, it conceded in its press release that it doesn't expect Humira biosimilars to launch in the U.S. until 2022 because of Humira patents. Momenta Pharmaceuticals and other biosimilar drugmakers have been litigating for a faster launch schedule, but this admission suggests that's less likely.
Additionally, the company reported that a collaboration with Mylan on a biosimilar to Orencia hit a roadblock. Their formulation failed to meet its primary pharmacokinetic endpoints in a Phase 1 study, an event that will cause development delays.
Momenta Pharmaceuticals revenue could continue lower until the FDA approves its 40 mg Copaxone. The 40 mg variation has become much more widely prescribed than the 20 mg version, and that trend is going to accelerate now that Mylan has a 40 mg formulation on the market.
The Humira hiccup is disappointing because Humira is the world's best-selling drug with $18 billion in annual sales. Ultimately, a launch will open up a big market for Momenta Pharmaceuticals, but it could be years before that materializes in the U.S.
As for Orencia, Mylan and Momenta Pharmaceuticals plan to study the data to determine where they went wrong. The two companies have plenty of resources to get this program back on track, but again, it could take some time.
Overall, Momenta Pharmaceuticals' GAAP operating expenses of $58.6 million in the third quarter significantly exceeded the company's $24 million in profit-sharing and milestones, so investors should expect losses to continue as the company continues to spend heavily on biosimilars R&D.
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 October 9, 2017