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Here's Why Momenta Pharmaceuticals Stock Rose 10.8% on Monday

By Maxx Chatsko - Updated Mar 2, 2020 at 5:50PM

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Investors ran back into the stock after one of the worst weeks in market history. Will it prove sustainable?

What happened

Shares of Momenta Pharmaceuticals (MNTA) jumped 10.8% on Monday as investors rushed to take advantage of last week's record market sell-off. The S&P 500 declined by double digits in the last week of February. Unfortunately, that coincided with the full-year 2019 earnings reports of many companies, including Momenta Pharmaceuticals. 

The company reported full-year 2019 operating results on Feb. 26 and provided an update on its pipeline. The financials weren't great, but Momenta expects to achieve important clinical milestones in 2020. That was enough for investors. At market close on Monday, the pharma stock had settled to a 10.8% gain.

A man holding a large white arrow pointing up.

Image source: Getty Images.

So what

Momenta Pharmaceuticals is developing biologic drugs against immune diseases. It ended 2019 with $545 million in cash, although it reported an operating loss of $298 million last year. Despite that, the stock has soared 58% since the beginning of 2020 as investors anticipate important milestones this year. 

For example, the company expects to report the next batch of data for M254 in the blood disorder immune thrombocytopenic purpura (ITP) in the second quarter of 2020 and launch a new phase 2 study for the drug candidate in chronic inflammatory demyelinating polyneuropathy (CIDP), a disease of the nervous system. Meanwhile, the top drug candidate, nipocalimab, is expected to report topline results for a phase 2 study in myasthenia gravis (MG) in the third quarter of 2020.

Importantly, Momenta Pharmaceuticals expects full-year 2020 adjusted operating expenses in the range of $220 million to $240 million, compared with $298 million in 2019. Guidance suggests the company will preserve cash and reduce operating losses in the year ahead.

Now what

Investors have handed Momenta Pharmaceuticals a market cap of $3.6 billion as they await important clinical milestones in 2020. The stock has more than doubled in the last three months, so it's not too surprising that it fell during the broader market correction. For now, all investors can do is wait for clinical trial results and commercial updates.

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