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Momenta (MNTA) Down 16.7% Since Last Earnings Report: Can It Rebound?

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It has been about a month since the last earnings report for Momenta Pharmaceuticals (MNTA - Free Report) . Shares have lost about 16.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Momenta due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Momenta Reports Narrower-Than-Expected Loss in Q3

Momenta reported loss per share of 45 cents in the quarter (excluding restructuring charges), narrower than the Zacks Consensus Estimate of 63 cents but wider than the year-ago loss of 44 cents.

Revenues in the quarter came in at $14.9 million, significantly down from $24.1 million in the year-ago quarter and missed the Zacks Consensus Estimate by 13.2%.

Quarter in Detail

Momenta’s top line comprises product revenues of $13.6 million earned from Sandoz’s sales of Glatopa, a generic version of Copaxone (20 mg), compared with $10.9 million in the year-ago quarter. The increase in product revenues was primarily due to non-recurring deduction of a $5-million contractual amount in 2017, which was offset by lower net sales of Glatopa, driven by Mylan N.V.’s entry into the Copaxone market.

Research and development revenues came in at $1.3 million compared with $13.2 million in the year-ago quarter. The decrease was primarily due to a $10-million milestone achieved in the 2017 period.

Research and development expenses decreased to $30.7 million from $37.9 million in the year-ago quarter due to a decrease in external R&D expenses for M923. General and administrative expenses were roughly flat at $20.4 million.

Pipeline Updates

As a result of its strategic review (results announced in October 2018), Momenta plans to advance its two late-stage biosimilar assets, M923, which is its wholly-owned proposed biosimilar to AbbVie’s Humira, and M710, which is its proposed biosimilar to Regeneron’s Eylea being developed in collaboration with Mylan. The company is in discussions with its collaboration partner, Mylan, to exit its participation in the development of its five other biosimilar programs, including M834, a proposed biosimilar to Orencia.

Momenta recently announced that it entered into a settlement with AbbVie Inc., to enable the commercialization of M923. Per the terms of the agreement and subject to approval by health regulatory authorities, Momenta may launch M923 in the United States on Nov 20, 2023 and in Europe upon approval by the European Medicines Agency.

The company intends to submit a biologics license application for M923 to the FDA in the fourth quarter of 2018 and a marketing authorization application in the European Union in the first half of 2019.

Momenta is now seeking commercialization partners for M923.

In August 2018, Mylan initiated a clinical trial in patients with diabetic macular edema to compare safety, efficacy and immunogenicity of M710 with Eylea.
Momenta’s novel auto-immune portfolio includes M230, a Selective Immunomodulator of Fc receptors (SIF3); M281, an anti-FcRn monoclonal antibody; and M254.

In October 2018, Momenta announced additional data from its phase I study of M281 in healthy volunteers.

The company announced that it plans to commence two phase II proof of concept clinical trials, one in generalized myasthenia gravis (gMG) and one in hemolytic disease of the fetus and newborn (HDFN), in the fourth quarter of 2018.

The company intends to initiate a phase I/II proof of concept study in immune thrombocytopenic purpura (ITP) in early 2019, pending regulatory feedback.
 

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months.

VGM Scores

At this time, Momenta has a poor Growth Score of F, however its Momentum Score is doing a bit better with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Momenta has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.




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