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Momenta Reports Wider Loss, Beats on Revenues

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Momenta Pharmaceuticals Inc. (MNTA) reported fourth quarter 2013 net loss per share of 59 cents, wider than the Zacks Consensus Estimate of a loss of 45 cents. The year-ago loss was 35 cents.

Fourth quarter revenues of $12.8 million were almost flat year over year. Revenues surpassed the Zacks Consensus Estimate of $9 million. Revenues comprised entirely of collaboration revenues in the fourth quarter. Collaboration revenues included product revenues and research and development revenues.

Product revenues represented royalty received from Novartis (NVS) pertaining to sales of the generic version of Lovenox. Product revenues were $4.9 million, below the year-ago revenues of $10.8 million due to lower prices and reduced market share.

Research and development expenses were $32.2 million, up from $21.5 million in the year-ago quarter. The increase was attributable to biosimilars process development and research costs, personnel expenses and facilities-related expenses. General and administrative expenses increased to $10.8 million from $9.4 million in the year-ago quarter mainly due to the timing of legal fees related to patent litigation.

2013 Results

Momenta reported full year 2013 loss of $2.13 per share, wider than the Zacks Consensus Estimate of $2.00 and the 2012 loss of $1.16 per share.

Full year revenues were $35.5 million, beating the Zacks Consensus Estimate of $31 million. Revenues in 2012 were $63.9 million. Revenues declined in 2013 due to lower Lovenox prices and loss of market share resulting from increased competition.


Apart from reporting fourth quarter earnings, Momenta provided an update on its pipeline. Momenta's generic version of Teva Pharmaceutical Industries Ltd.’s (TEVA) Copaxone is currently under FDA review. In Dec 2013, the District Court modified the injunctions to exclude the 2015 invalidated Copaxone patent and the permanent injunction now expires on May 24, 2014.

Three biosimilar candidates are currently under development, namely, M923 and M834 for autoimmune and other inflammatory indications, and M511 for the treatment of cancer. As per the worldwide biosimilar collaboration with Baxter for products M923 and M834, Momenta expects to achieve milestone related payments in the second half of 2014. M923 will enter the clinic in Europe in the second half of 2014. For M511, Momenta may seek a new collaboration partner to assist in its development and commercialization.

A proof-of-concept phase 1/2 study evaluating M402 in combination with Abraxane and Gemzar in patients with pancreatic cancer is in progress. Data from Part A of the study will be out in the first half of 2014. The Part B of the study will start by the end of 2014. Part B will evaluate the antitumor activity of M402 in combination with Abraxane plus Gemzar, versus Abraxane plus Gemzar alone.

2014 Guidance

Total operating expenses, excluding stock-based compensation and net of collaborative revenue, are expected in the range of $30–$32 million per quarter. Momenta expects average net cash usage in the vicinity of $30 million per quarter, excluding revenue from the potential launch of M356.

Momenta carries a Zacks Rank #3 (Hold). The year 2014 will be eventful for Momenta as the company is likely to achieve development milestones in each of the three businesses - complex generics, biosimilars and novel drugs. These development milestones include – approval of generic version of copaxone, M923 (first biosimilar) to enter clinic and M402 (novel drug) to commence part B of its phase I/II trial.

We look forward to the launch of generic version of Copaxone this year, pending FDA approval. Momenta’s pipeline looks promising with candidates like M923, M834 and M402.

Right now, Actelion Ltd. (ALIOF) looks more attractive with a Zacks Rank #1 (Strong Buy).

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