Momenta Moves Meticulously

Momenta Pharmaceuticals (MNTA) continued the slow grind of drug development in the second quarter while it tries to decide the best course of action to maximize the value of its pipeline.

Momenta Pharmaceuticals results: The raw numbers

Data source: Momenta Pharmaceuticals.

What happened with Momenta Pharmaceuticals this quarter?

• Revenue from sales of Glatopa 20 and 40, Momenta's generic version of Teva Pharmaceutical's (TEVA -0.28%) multiple sclerosis drug Copaxone, came in at $11.8 million, substantially less than the $19.1 million in the year-ago quarter as Mylan's (MYL) entry into the generic Copaxone market has pushed down prices substantially.
• The rest of the revenue comes from reimbursed research and development expenses, which were down year over year.
• The expense line jumped substantially, causing the larger loss, due to an amended contract with GlaxoSmithKline to manufacture M923, its Humira biosimilar. Momenta is obligated to pay $15 million this month and another $15 million by July 1, 2019, but both payments got charged to the profit-loss statement in the second quarter.
• In June, Novartis's (NVS 3.35%) Sandoz division, which sells Momenta's Glatopa 20 and 40 as well as enoxaparin, a generic version of Sanofi's Lovenox, decided to stop selling enoxaparin. The sales were so low that Momenta hasn't been breaking them out, so the move won't materially affect the revenue line.
• Momenta and Mylan -- which is a biosimilar collaborator as well as being a generic competitor -- still haven't figured out why M834, their biosimilar Orencia, failed a phase 1 trial last year, but they continue to investigating the results.
• As previously announced, Momenta is undergoing a strategic review to maximize the value of its pipeline. The plan was to have it done by now, but management said it'll take a few more weeks to complete.

Image source: Getty Images.

What management had to say

President and CEO Craig Wheeler didn't give any hints about what might be sold or licensed after the strategic review is complete, but he did want investors to know: "It's important to note that the sale of the company has not been a focus of this strategic review, and we are not in discussions for the sale of the company as a whole."

Wheeler also gave some details on the rocky competition with Teva and Mylan in the generic Copaxone (glatiramer acetate) market:

The glatiramer acetate market is responding to competition as expected, with increased pricing pressure from customers. We expect that as contracts come up for bid, market share will continue to grow, and we believe that Sandoz understands the market and how to operate successfully in this environment. Given these market dynamics, we believe that profit share revenue from our Glatopa products will be somewhat unpredictable and has the potential to vary from quarter to quarter.

Looking forward

Clearly Momenta's strategic review is the biggest, most pressing news investors should be watching for. The $321 million with which the company ended the second quarter won't be enough to advance all of its current assets, so something is going to have to go.

Looking ahead -- albeit subject to change -- the current plan is to start two proof-of-concept studies for M281, its recombinant anti-FcRn drug, in the fourth quarter of 2018. Momenta also plans to start a phase 1/2 study for M254, its hyper-sialylated IVIG drug, in late 2018 or early 2019. That trial will start with healthy volunteers and then move into patients with a blood disease called idiopathic thrombocytopenic purpura, which the regular version of IVIG is already approved to treat.