Momenta Pharmaceuticals, Inc. (NASDAQ:MNTA)

MNTA

They have a patent on a generic version of Lovenox. Last week the company was blocked by a federal appeals court from marketing their product. If their patents are upheld, their revenues will skyrocket. Lovenox is used to prevent blood clots, post surgery.

There are currently 11500 MNTA shares in my "fund" with break-even of around 3.56 USD.
http://caps.fool.com/Blogs/fund-trades/678775.

Insider selling and a good run up lately are my reasons for down thumbing this stock. Also they only had a tiny increase in revenues this past quarter, which might indicate they have reached a max in sales?? Best idea wwould be to ask insiders why they are selling? IMHO

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.

Small and cheap. Very good margins. Good sales and earnings growth. Insiders own 15%. Good balance sheet.

innovation and patents will carry this one along way...potential buyout if patents hold up.

We still have time!

One word says it all: Generics- People not only want Affordable medications, they Demand it!!!

very speculative play, since no one can really tell what will happen in the upcoming trials, and what will future FDA decisions will be.
But with current price at 800 Million dollars, Cash equivalents of 350 Million dollars, and recent year earnings of about 200 Millions, the possible profits out-weight the possible losses.

HG

This company has a number of drug candidates in its pipeline.

They're heavily into generic drugs, which should position them well in coming years.

Good value

In the interest of saving time I am going to just include some information I recently sent to a friend in an email:

Here is some info I put together on MNTA a while ago. You should read the entire thread. Nothing I said below has really changed. Nothing has happened to the negative side, and the stock has still gone down even though they are making money hand over fist. I think it is due for a pop and we are in a buying opportunity, and I think it is a great long term investment on top of that. This is my biggest holding. If you look at where they were a year ago

• No drugs approved, surviving on R&D money
• $75M in debt

And now…
• Sole generic on a blockbuster drug
• All debt paid
• Close to $200M in the bank
• Increasing cash position by about $50M per quarter
• Closer to approval on another major drug

And still about the same stock price ($700M ish market cap). This is why I say it is due for a pop.

The big short term risk on this stock is that they have only one drug on the market and the pipeline doesn’t have the next for a year out or so (although that could be 0-2 years). The current drug is a generic for a blood thinner Lovenox. So the only companies that can sell it are MNTA and the original drug maker. While there are just two manufacturers on the market the price and profits are huge. There is one other company that has a potential for approval and that is TEVA. If TEVA gets an approved drug MNTA will probably swing to a loss. MNTA sells the drug through a large partner, and the agreement with the partner is that they get 45% of the profits while they are the only generic, and if another is approved that drops to a 10% royalty. Big difference.

I have spent a long time looking into this, and I am getting more confident that TEVA will never get approved and MNTA will stay the sole generic. If that is the case, MNTA will make close to $200M/year in profits for several years to come (until something better comes along). The approval process takes about seven years so they would have protection for a long time. At a $200M/year profit rate the company should be valued at $2B (conservatively). That's about 3x what they are now. I could make a convincing argument for double that (P/E of only 20, high growth prospects, etc.).

The reason I don't think TEVA will get approved is because they said they would in Aug, Sept, Oct, Dec, Jan, and finally said they would comment no further until they get approval. I have read what the TEVA CEO says about this in the last few conf call transcripts and it sounds like a lie. The latest deficiency letter TEVA got from the FDA puts their approval out 3-18 months from February (12 is the industry average for the type of rejection they got). And it could be rejected again. And it could be in this state forever. I spent a long time looking at investment boards on this, and it looks like the experts on the boards feel there is a good chance TEVA will never get approved. This is a very complex drug made from many different very large molecules derived from pigs’ intestines. Even the original manufacturer can’t tell you exactly what is in the drug because they don’t know themselves, but MNTA can. This is what their technology can do. Analyze and reverse engineer these combinations of large molecule drugs. TEVA’s version of the drug is also from pig intestine and may work like Lovenox, but they have to prove it is the same exact same combination of molecules and behaves the same exact way. It looks like the TEVA drug is already sold as a generic in other countries, but the FDA has yet to say it’s the same. The speculation on the boards is that this is a drug made by an Italian company and already sold in other countries. I have seen some scientific journal summaries from a few years back that compare Lovenox to generics sold in other countries and they do have different characteristics. So I think TEVA’s version is something that scientific journals is staying is not the same as branded Lovenox. Drug companies are very secretive about this kind of thing so I don’t have a way to prove it, but if you ask me to connect the dots this is what I think is going on.

Worst case is MNTA accumulates cash until the TEVA approval. Under this circumstance I think the bad news is pretty much priced in already (based on what I say about where they were a year ago and the stock price not moving.

Best case is MNTA stays the sole generic, they get the next drug to market, and get a partnership with a major drug company (all this could happen within the next 18 months or so). If these stars align this stock could be worth as much as 10x what it is now. So big upside possible with limited downside risk.

One last comment is that the FDA still has not sorted out a pathway for biologic drug approval. These drugs are just starting to come off patent protection. It could be they have two approval levels (exact replacement, and similar). When the FDA sorts this out it will probably bode well for MNTA. They are the only company that has successfully gotten an approval as a biologic replacement.

Porte

Cheap at the price with room to run.

nilesgold haiku

Lovenox sales are strong

Copaxone approval forthcoming

Short squeeze for the win

becoming a cash cow. MNTA is undervalued even if Teva started selling Lovenox tomorrow. The future looks good by developing drugs with high revenue and mad growth.