Too bad all good things must come to an end.
Momenta and Novartis' enoxaparin became a blockbuster generic -- literally, it sold more than $1 billion in a year -- because Lovenox was already a multibillion-dollar drug and the duo had no competition for 18 months. Recently, though, Sanofi launched an authorized generic, and Watson Pharmaceuticals
That's a triple whammy for Momenta, losing market share and pricing power as a monopoly. Plus, its agreement with Novartis shifts from a profit share to a royalty.
Since the launch of the second generic just occurred, Momenta wasn't willing to ponder a guess as to how much in royalties it might get from Novartis this year. The only guidance was that it expects to report a net loss in the second through fourth quarters of next year. In the first quarter, Momenta plans to close its deal with Baxter
While Momenta is back to its losing ways, it's not in quite as bad a shape as your typical development-stage drugmaker since it will have royalty revenue coming in to cover some of its expenses. And with the Baxter payment, Momenta plans on exiting the first quarter with $400 million in the bank, which should give it a nice runway to get another drug approved, hopefully before needing to go back to the markets to raise more capital.
Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Momenta Pharmaceuticals. Motley Fool newsletter services have recommended buying shares of Novartis and Momenta Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.