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Momenta (MNTA) Incurs Wider Y/Y Loss, Glatopa Sales Decline

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Momenta Pharmaceuticals Inc. MNTA reported a loss per share of 63 cents in the quarter, wider than the year-ago loss of 46 cents.

Revenues in the quarter came in at $4.8 million, significantly down from $26.6 million in the year-ago quarter.

Quarter in Detail

Momenta’s top-line comprises product revenues of $3.5 million earned from Sandoz’s sales of Glatopa, a generic version of Copaxone (20 mg), compared to $23.4 million in the year-ago quarter. The decrease was a result of lower sales due to Mylan’s MYL entry into the Copaxone market.

Collaborative research and development revenues came in at $1.3 million, compared with $3.2 million in the year-ago quarter. The decrease was primarily due to lower revenue recognized from the upfront payment from Mylan as compared to the amount recognized in the 2017 period and lower reimbursable expenses for the complex generic programs.

Research and development expenses decreased to $33.2 million from $36.1 million in the year-ago quarter due to a decrease in external R&D expenses for M923. General and administrative expenses also decreased 11% to $20.6 million.

Outlook Reiterated

Momenta expects operating expenses (excluding stock-based compensation and net of collaborative revenues) in the range of $180-$200 million in 2018. Operating expenses in second-quarter 2018 are projected around $45-$55 million.

Momenta expects to generate revenues of $45 million from Mylan as upfront payment on a quarterly basis.

Pipeline Updates

Momenta announced that the FDA has finally approved Sandoz's Abbreviated New Drug Application for Glatopa 40 mg. Both companies earlier suffered a setback with the FDA issuing a warning letter to Pfizer PFE in February 2017, which is Sandoz’s contracted fill/finish manufacturing partner for Glatopa. Nevertheless, Sandoz secured customer contracts and orders of Glatopa 40 mg/mL have been shipped.

Meanwhile, Momenta continues to progress with its biosimilars pipeline. In January 2018, Momenta and Mylan announced plans to initiate a patient clinical trial of M710 — a proposed biosimilar of Eylea — in the first half of 2018.  The Biologics License Application (“BLA”) for Momenta’s M923, a biosimilar version of Humira, is also ready to be filed with the FDA.  However, the filing of the BLA is dependent on the outcome of the Company’s ongoing strategic review.

Momenta suffered a setback when the company and partner Mylan announced that M834, a proposed biosimilar for Orencia, did not meet its primary pharmacokinetic end points in a phase I study to compare the pharmacokinetics, safety and immunogenicity of M834 to Orencia in normal healthy volunteers. Hence, Momenta and partner Mylan continue to evaluate the next course of action.

Momenta’s novel autoimmune portfolio includes — M230, a Selective Immunomodulator of Fc receptors (SIF3), M281, an anti-FcRn monoclonal antibody and M254. Momenta successfully completed a phase I single ascending dose study in healthy volunteers for M281.

In January 2018, Momenta reported positive top-line data on M281 from a phase I single ascending dose (“SAD”) and multiple ascending dose (“MAD”) study of normal human volunteers. The phase I randomized, double-blind, placebo-controlled study evaluated the safety, tolerability, pharmacokinetics and pharmacodynamics of M281.  Consequently, Momenta is finalizing its development strategy for M281 and is planning two proof of concept clinical trials in the second half of 2018, pending regulatory feedback.

Meanwhile, Momenta and collaboration partner CSL began dosing subjects in the phase I trial in healthy volunteers to evaluate the safety and tolerability of M230. The study is expected to be completed in 2019.

Momenta is also on track to complete the IND-enabling toxicology study this year and expects to initiate a trial in the second half of 2018.

Our Take

Momenta reported a wider year-over-year loss in the first quarter. While the FDA approval of Glatopa 40 mg should relieve Momenta, competition will limit market share gains. We note that Mylan has already won the FDA’s approval for a generic version of Teva Pharmaceuticals TEVA Copaxone 40 mg. Notably, this is the first generic of Copaxone that has been approved. Since Mylan was one of the first applicants to submit a substantially complete ANDA for glatiramer acetate Injection, 40 mg/mL, containing a Paragraph IV certification, the company and other first filers may be eligible for 180 days of generic drug exclusivity.

 

 

Momenta’s stock has gained 65.2% in the last six months as against the industry’s decline of 10.9%. Following the announcement of first-quarter of 2018 results, shares were up 1.17%. Meanwhile, the progress of biosimilars pipeline was encouraging.

Zacks Rank

Momenta currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

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