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Loss at MNTA Narrower than Expected

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Momenta Pharmaceuticals Inc. (MNTA - Free Report) reported fourth quarter 2012 net loss per share of 35 cents, narrower than the Zacks Consensus Estimate of a loss of 41 cents, but wider than the year-ago loss of 2 cents. The wider year over year loss was primarily attributable to lower revenues.

Fourth quarter revenues of $12.7 million were down 56.8% year over year. Revenues surpassed the Zacks Consensus Estimate of $10 million.

Full year 2012 net loss per share was $1.16 compared with earnings per share of $3.55 in 2011. The Zacks Consensus Estimate for 2012 hinted at a net loss of 71 cents per share. Revenues in 2012 declined 77.4% year over year to $63.9 million. Revenues for 2012 were below the Zacks Consensus Estimate of $81 million.

Lower sales and unfavorable pricing of Momenta’s generic version of Sanofi’s (SNY - Free Report) Lovenox contributed to the decline. We note that Momenta and Sandoz inked a deal in Nov 2003 to jointly develop and commercialize a generic version of Lovenox.

We note that following the launch of a competitor’s generic version of Lovenox in Jan 2012 there was a change in the revenues that Momenta receives from Sandoz. The change was from a hybrid profit share to a straight royalty structure.

Sandoz reported fourth quarter 2012 generic Lovenex net sales of $85 million, down 62.2% year over year.

In the fourth quarter of 2012 research and development expenses were $1.9 million, compared with $3.3 million in the year ago quarter. The increase was attributable to Momenta’s efforts to develop its pipeline. In 2012 general and administrative expenses were $43.7 million, compared with $38.7 million in the year ago quarter.

2013 Guidance

Total operating expenses, excluding stock-based compensation and net of collaborative revenue, are expected around $30 million per quarter in 2013. Momenta expect average net cash usage in the range of $20 million to $24 million per quarter for a total operating cash usage of roughly $90 million.


Apart from releasing its earnings results, Momenta also provided an update on its pipeline. Momenta stated that the abbreviated new drug application (ANDA) for M356, its generic version of Teva Pharmaceutical Industries Ltd.’s (TEVA - Free Report) Copaxone, is under active review by the US Food and Drug Administration (FDA). In the patent litigation bought by Teva against Sandoz and Momenta, appellate briefing for the patent is expected to be completed in the current quarter.

Three biosimilar products are currently under development, namely, M923 and M834 for the treatment of autoimmune and other inflammatory indications, and M511 for the potential treatment of cancers. Momenta intend to submit an Investigational New Drug (IND) application for M923 in 2014.

Momenta carries a Zacks Rank #3 (Hold). Right now, Actelion Ltd. looks more attractive with a Zacks Rank #1 (Strong Buy).

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