What happened

After jumping 18% on Friday following its successful raise of $200 million, Momenta Pharmaceuticals (NASDAQ:MNTA) proceeded to fall 9.5% yesterday and 10.4% today, giving up all of its gains and then some.

Welcome to volatile biotech investing in a company with clinical data that's largely years away.

So what

Momenta's lead novel asset, M281, isn't scheduled to read out phase 2 data until 2020 and 2021 for the two immunological diseases that Momenta is targeting. A proof-of-concept study for an autoimmune disease drug, M254, is scheduled to start later this year or early in 2019, putting a readout in 2020.

Investors might get to see clinical data in 2019 from a phase 1 study for M230, which is partnered with CSL, but that's very early-stage.

Since biotech valuation can often be more art than science, a dearth of valuation-changing data can result in substantial volatility as investor sentiment changes.

Man in front of monitors displaying stock charts, clenching fists to his head

Image source: Getty Images.

Now what

In addition to its novel pipeline, Momenta also has a couple of biosimilar drugs: M923, a biosimilar to Humira that's wholly owned, and M710, a biosimilar to Eylea that's in phase 3 development being run by partner Mylan.

M923 is ready to be submitted to regulators, and Momenta has signaled that it would like to find a partner to take over the commercialization, so that news could drop at any point.

Until then, long-term investors can just ignore the double-digit stock price changes on no news, and wait for clinical trial data that will change the biotech's valuation fundamentally.