Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA)

CAPS Rating: 4 out of 5

A biotechnology company specializing in the detailed structural analysis of complex mixture drugs of the development of generic or biosimilar versions of complex drug products as well as to the discovery and development of novel drugs.

Recs

3
Player Avatar zzlangerhans (99.83) Submitted: 11/2/2011 9:50:03 AM : Underperform Start Price: $14.66 MNTA Score: +6.27

If you know anyone who claims to be an expert on biotech stocks, ask them if they know what's going to happen with Momenta Pharmaceuticals. If they start telling you what's going to happen, laugh and walk away, because no one knows where this is going.

If Momenta could just freeze the current situation for the foreseeable future, they would be in great shape. Their generic enoxaparin is a banging success, with about 85M in quarterly sales and operations near the maximum capability of the supply chain at 45-50% of the entire enoxaparin market. Unfortunately for Momenta, other pharmas saw the windfall and developed their own versions of generic enoxaparin, the first of which was approved by the FDA in September. That news clobbered the share price, which has since mostly recovered now that the company has obtained an injunction blocking sales of the other generic enoxaparins.

If that issue wasn't complex enough, Momenta still has to deal with a suit from Sanofi, the marketer of branded enoxaparin Lovenox. The company also has a patent infringement lawsuit against Teva regarding their generic enoxaparin, which is currently in the discovery phase. And finally Momenta is trying to avenge itself against Teva by getting a generic version of the MS drug Copaxone approved, which of course Teva is fighting tooth and nail. The first phase of the trial which dealt with inequitable conduct was completed in 7/11 but it is unclear to me if a ruling has been issued. A Markman hearing is scheduled for 12/11 and a preliminary trial date is set for 2/13.

Momenta's enoxaparin partner Sandoz has already announced that the royalty structure has already been altered by the Amphastar approval, and if another generic enoxaparin is approved it will affect Momenta's royalties much more significantly. Alternating negative and positive developments have pushed Momenta's share price up and down dramatically and I expect this pattern to continue in the near future.

Anyone claiming to know what will happen with Momenta is claiming to know the outcomes of at least four independent court cases, as well as multiple future FDA decisions. Not likely. And I wouldn't touch a ten foot pole that was touching Momenta stock with a ten foot pole. But for the purposes of CAPS, volatility is a bonus rather than a liability. With the latest development being positive and the momentum in Momenta's favor, the time has come for a red thumb before the next downward swing.

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Member Avatar Momentum21 (74.35) Submitted: 11/10/2011 2:26:31 PM
Recs: 0

The "current situation" was baked in the earnings guidance, no? Forward earnings already captures the uncertainty of more competition and doesn't seem unreasonable. There is definitely risk but at least they are able to show some movement forward when the rest of the sector is going to be at a greater risk given the macro climate...so all I am saying is one ten foot pole might be enough. : )

Short it around 22 when I exit...LOL

Member Avatar shanelofgren (32.33) Submitted: 1/5/2012 8:09:02 PM
Recs: 0

I saw this company on a screen and thought I'd take a look at it. I tried to piece it all together and then came here. What do you know, you've summed it up better than my couple of hours research could manage. I could do further research, but I think my time is probably better spent elsewhere.

I want to say thanks for all of the insight and research you give us. I've been reading your stuff for quite awhile though I haven't commented, but I thought I'd take a few minutes to thank you for the additional hours you've saved me. Please keep up the good work. It is appreciated.

P.S. 99.20 without ever red thumbing a leveraged ETF?! Very impressive.

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