For the past few quarters, Momenta Pharmaceuticals
Source: Capital IQ, a division of Standard & Poor's. P/E based on Sept. 16.
But you really couldn't blame investors for being unwilling to pay up to own the biotech. Sure, Momenta was bringing in cash. But there was always the chance that the money provided through its partnership with Novartis
That day appears really close.
According to multiple news reports -- although nothing from the company or the Food and Drug Administration that I've seen -- Amphastar Pharmaceuticals has gained FDA approval for its generic version of Sanofi's
The added competition is a triple negative for Momenta: A smaller market share at a lower price will bring in lower revenue, and the new entrant changes Momenta's cut from a revenue-sharing partnership to a royalty from Novartis.
Curiously, The Wall Street Journal reports that Amphastar Pharmaceuticals said the drug was approved "pending review of labeling matters," which is a little weird since the generic drugs usually just have the same label as the branded product. If Amphastar's generic isn't AB rated, meaning pharmacists can't substitute without contacting the doctor, it would lower the impact of the competition for Momenta. Still, investors shouldn't count on something that simple; the Journal report also says the drug is "therapeutically equivalent" to Lovenox, which is kind of the definition of AB-related.
Momenta's best strategy at this point might be to sue Amphastar to stop the launch. The biotech initiated a lawsuit against Teva Pharmaceuticals
With today's fall, Momenta looks even cheaper using trailing 12-month metrics, but until there's a little more clarity about when Amphastar will launch and how much impact it might have, there's little reason to jump in at this point.
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