Momenta Pharmaceuticals (NASDAQ:MNTA) released third-quarter earnings, but with lackluster sales of MS drug Glatopa, most of the conference call was spent on the company's future, including plans for its immune drugs M281 and M254, which it went over at its R&D day in October.

Momenta Pharmaceuticals results: The raw numbers

Metric

Q3 2018

Q3 2017

Year-Over-Year Change

Revenue

$14.9 million

$24.1 million

(38.2%)

Income from operations

($51.8 million)

($34.5 million)

N/A

Earnings per share

($0.65)

($0.44)

N/A

Data source: Momenta Pharmaceuticals.

What happened with Momenta Pharmaceuticals this quarter?

  • Sales of Glatopa products were $14 million in the third quarter, which was up from $11 million in the year-ago quarter, but that quarter had a $5 million deduction in its payments from Novartis (NYSE:NVS), so the net effect was a decline of about $2 million in product sales due to Mylan (NASDAQ:MYL) entering the market with its generic.
  • The rest of the revenue decline was mostly from a $10 million milestone payment in the year-ago quarter.
  • In October, Momenta announced its plan for corporate restructuring, which involves reducing its involvement in developing biosimilars to focus on its pipeline of novel drug candidates targeted at immune-mediated disorders. In the process, Momenta cut its workforce by approximately 50%.
  • The company is in ongoing discussions with Mylan to figure out what to do with the products from their biosimilar development pact. Momenta plans to continue development of M710, its biosimilar of Regeneron Pharmaceuticals' Eylea, but is looking to exit the development of five other programs that are part of the collaboration with Mylan.
  • M923, a biosimilar of AbbVie's (NYSE:ABBV) Humira, wasn't part of the Mylan deal, but Momenta is looking to offload that drug too. To help facilitate finding a partner, Momenta reached an agreement with AbbVie that the biosimilar can be launched in November of 2023 in the U.S. and in the EU as soon as Momenta or its partner can gain approval.
Scientist working in a lab.

Image source: Getty Images.

What management had to say

President and CEO Craig Wheeler went over the plans for M923:

We're excited about the potential launch of this product. However, there are significant manufacturing expenses ahead to enable us to market this product candidate. And we believe bringing a commercial partner on board in the near-term could meaningfully reduce our share of these expenses. 

With Glatopa sales not paying the bills and only $281.6 million in the bank, Momenta will likely need to raise additional cash to get its pipeline drugs past the finish line. A secondary offering is an option, but Wheeler said the company is considering partnering some of its wholly owned programs, perhaps outside the U.S., as well: "As we always are, we are evaluating the potential for additional public financing. However, I would emphasize that there are alternatives available to extend our runway, including multiple business development opportunities."

Later, he noted, "We have adequate cash in the company to enable us to choose the right timing and sources of capital to fund this promising portfolio."

Looking forward

With the data for M281 and M254 not due out until 2020, the only obvious near-term events for Momenta are finding a partner for M923 and a resolution of its partnership with Mylan. There's also the possibility of out-licensing M281 and M254, but Momenta would be able to get a better price if it waits until it generates the data, so a secondary offering may end up being the best choice for shareholders even though it'll result in some dilution.

Brian Orelli has no position in any of the stocks mentioned. The Motley Fool recommends Momenta Pharmaceuticals and Mylan. The Motley Fool has a disclosure policy.