For the past few quarters, Momenta Pharmaceuticals (Nasdaq: MNTA) has been one of the cheapest money-making biotechs out there. Even pharmas facing patent cliffs haven't gotten this cheap.

Company P/E
Momenta Pharmaceuticals

4.6

Biogen Idec

22.8

Celgene (Nasdaq: CELG)

27.9

Amgen (Nasdaq: AMGN)

11.8

Cephalon

11.9

Source: Capital IQ, a division of Standard & Poor's. P/E based on Sept. 16.

But you really couldn't blame investors for being unwilling to pay up to own the biotech. Sure, Momenta was bringing in cash. But there was always the chance that the money provided through its partnership with Novartis (NYSE: NVS) would dry up.

That day appears really close.

According to multiple news reports -- although nothing from the company or the Food and Drug Administration that I've seen -- Amphastar Pharmaceuticals has gained FDA approval for its generic version of Sanofi's (NYSE: SNY) Lovenox, which will compete with Momenta and Novartis' version. Amphastar is a private company, but if you'd like to take advantage of the positive news, Amphastar partner Watson Pharmaceuticals (NYSE: WPI) has shares on the open market.

The added competition is a triple negative for Momenta: A smaller market share at a lower price will bring in lower revenue, and the new entrant changes Momenta's cut from a revenue-sharing partnership to a royalty from Novartis.

Curiously, The Wall Street Journal reports that Amphastar Pharmaceuticals said the drug was approved "pending review of labeling matters," which is a little weird since the generic drugs usually just have the same label as the branded product. If Amphastar's generic isn't AB rated, meaning pharmacists can't substitute without contacting the doctor, it would lower the impact of the competition for Momenta. Still, investors shouldn't count on something that simple; the Journal report also says the drug is "therapeutically equivalent" to Lovenox, which is kind of the definition of AB-related.

Momenta's best strategy at this point might be to sue Amphastar to stop the launch. The biotech initiated a lawsuit against Teva Pharmaceuticals (Nasdaq: TEVA) late last year, claiming that its method for ensuring that the generic is the same as the branded product impedes on Momenta's patents. Perhaps that's true of Amphastar's technique as well?

With today's fall, Momenta looks even cheaper using trailing 12-month metrics, but until there's a little more clarity about when Amphastar will launch and how much impact it might have, there's little reason to jump in at this point.

You can keep track of Momenta as it deals with the impending competition by adding it The Fool's free My Watchlist service. Start keeping track of all our Foolish analysis on Momenta.

Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Momenta Pharmaceuticals and Teva Pharmaceutical Industries. Motley Fool newsletter services have recommended buying shares of Momenta Pharmaceuticals, Novartis, and Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.