Momenta Pharmaceuticals (NASDAQ:MNTA) continues its transition from a drugmaker specializing in hard-to-make generic drugs to one focused on novel products. The financial numbers aren't going to be pretty during the transition, so investors should focus on the pipeline.

Fortunately, with $380 million in the bank, Momenta has a solid runway to get to at least proof of concept for its novel products.

Momenta Pharmaceuticals results: The raw numbers

Metric

Q2 2019

Q2 2018

Year-Over-Year Change

Revenue

$5.2 million

$13.0 million

(60%)

Income from operations

($116.6 million)

($70.8 million)

N/A

Earnings per share

($1.16)

($0.91)

N/A

Data source: Momenta Pharmaceuticals.

What happened with Momenta Pharmaceuticals this quarter?

  • The drop in revenue came from sales of Glatopa, a generic version of Teva Pharmaceutical's Copaxone, by Momenta's partner Novartis (NYSE:NVS). Momenta's share dropped to $3.3 million from $11.8 million in the year-ago quarter, because the drug faces competition from other generic-drug makers.
  • The rest of the revenue came from research-and-development revenue, which increased to $1.8 million, up about $0.5 million from the prior year. Unfortunately, the increase won't hit the bank account, because it comes from a higher recognition of a previous up-front payment as part of Momenta's biosimilar collaboration with Mylan.
  • On the pipeline front, Momenta started a phase 2/3 study testing nipocalimab in patients with warm autoimmune hemolytic anemia, which is caused by red blood cells being destroyed by the immune system. Data from the clinical trial should be available by the end of 2021.
  • Momenta completed a safety study showing that nipocalimab could be infused more quickly: 7.5 minutes to 15 minutes depending on the dose, compared to the old two-hour protocol. The shorter dosing regimen should make the drug more competitive compared to other treatments that might be available if the drug is approved in a few years.
  • M230, which is partnered with CSL, is also getting a dosage change, with CSL exploring the use of a subcutaneous injection. The formulation change will extend the phase 1 development, but injections are typically preferred by patients over infusions since injections are quicker and can usually be administered at home.
  • Momenta has been actively looking for a partner for M923, its biosimilar to AbbVie's Humira. So far, it hasn't been able to find a buyer -- not surprising, given that there could be eight companies that plan to launch biosimilars at the same time -- so Momenta is stopping development activity on the drug and won't make a manufacturing run that was planned for 2020.
  • The decision triggered a one-time, noncash charge for a fee it'll have to pay to its outsourced manufacturer. That charge, and a settlement with Amphastar, resulted in $64 million in one-time expenses, explaining the substantially larger loss for the quarter.
Scientist working in a lab.

Image source: Getty Images.

What management had to say

Craig Wheeler, Momenta's president and CEO, talked about M254, its hyper-sialylated IgG that's being developed as a replacement for intravenous immunoglobulin (IVIg):

IVIg has a mammoth footprint in autoimmune disease. It is a supply constrained $4.5 billion market across some 60 indications. This success comes even though IVIg carries a significant treatment burden for patients due to the very high doses needed to demonstrate efficacy as a single dose of IVIg can require two or more days to administer, and can result in serious adverse events.

Wheeler also covered the new indication for nipocalimab and competition from Alexion Pharmaceuticals (NASDAQ:ALXN) and potentially others:

On warm autoimmune hemolytic anemia, others have announced that they're going into it. Most notably, I think Alexion has plans to take their soon-to-be molecule into it. We don't know of anybody else that is actually into a phase 2/3 what we consider potentially pivotal trials for us. And so we are in the lead in that indication. So we'd expect to be competitive. It's a large indication, and we expect that we have a very competitive agent there with the characteristics of our molecule.

Looking forward

It's likely to be a sleepy second half of the year for Momenta. The first proof-of-concept data will not be coming until the first half of 2020, when a phase 1/2 clinical trial testing M254 in a blood disorder called idiopathic thrombocytopenic purpura is scheduled to read out. Results from a phase II study of nipocalimab in generalized myasthenia gravis should be released in 2020 as well, followed by a slew of results in 2021.