Momenta Pharmaceuticals, Inc.'s Rough Month

Momenta Pharmaceuticals (NASDAQ: MNTA) has had a rough month or so after seeing Mylan (NASDAQ: MYL) pass it up to get the first approval of a generic version of Teva Pharmaceutical's (NYSE: TEVA) multiple sclerosis drug Copaxone 40 mg. Then its biosimilar to Orencia failed a phase 1 trial, sending shares down further.

Nevertheless, the company is pressing on highlighting other drugs in its pipeline during its third-quarter conference call and hopes that it'll be able to gain Food and Drug Administration approval for its generic version of Copaxone 40 mg, called Glatopa, later this year or early next year.

Momenta Pharmaceuticals results: The raw numbers

What happened with Momenta Pharmaceuticals this quarter?

  • Revenue included a $10 million milestone payment for being the only 20 mg version of Copaxone on the market for a second year, but revenue still fell year over year because Mylan also gained approval of the 20 mg version so Momenta and partner Novartis (NYSE: NVS) had to make inventory price adjustments for Glatopa. Medicaid rebates also played into the year-over-year drop in product sales.
  • As of the earnings call, Momenta hadn't delved deep enough into the data for the failed phase 1 trial of M834 to know why the drug doesn't have the same properties as Orencia, but management noted that it's a complex drug and shouldn't affect the company's other biosimilar candidates.
  • M923, Momenta's wholly owned biosimilar to AbbVie's Humira that has already passed its phase 3, doesn't look like it'll launch until around 2023 after Amgen and Abbvie settled their patent litigation allowing Amgen to launch its biosimilar in January 2023.
  • The next biosimilar in the pipeline is M710, which will enter clinical development by early 2018; the company still hasn't said what drug M710 is a biosimilar for, but it will announce it by the time M710 enters the clinic.
  • In September, Momenta decided to opt in to the 50-50 cost and U.S. profit share with CSL for products developed under their collaboration agreement. The first drug from that deal, M230, is scheduled to enter the clinic later this year.

What management had to say 

Craig Wheeler, Momenta's president and CEO, pointed out that Mylan's launch will be a double whammy for Momenta and Novartis' Glatopa 20 mg:

The Glatopa 40 mg approval is being held up by issues at its contract manufacturer. Wheeler laid out three potential outcomes after the FDA reinspects the facility:

After regaining the rights to M923, Momenta has been looking for a new partner for the drug, but Wheeler notes it's been hard to get companies to sign on the dotted line:

Looking forward

One way or another, Glatopa 40 mg will eventually make it to market. If the contract manufacturer doesn't get its warning letter removed, Momenta and Novartis have an alternative supplier lined up that could be approved in the second half of 2018.

With the competition from Mylan, the opportunity isn't nearly as great as it would have been if Glatopa 40 mg were the only drug on the market, but Novartis' generic drug division, Sandoz, should be able to put up a formidable fight against Mylan. And with the lower cost, it's possible that insurers will require generic Copaxone to be the first drug used to treat multiple sclerosis patients, although it's hard to see how the increased volume could make up for the lower price due to multiple generic drug suppliers.

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Brian Orelli has no position in any of the stocks mentioned. The Motley Fool recommends Momenta Pharmaceuticals and Mylan. The Motley Fool has a disclosure policy.