Outlook for Momenta Pharmaceuticals

As we reported last week, U.S. District Judge Emmet Sullivan refused to issue a preliminary injunction after a request by Sanofi-Aventis (NASDAQ:SNY) to block Momenta (NASDAQ:MNTA) and Sandoz (unit of NASDAQ:NVS) generic version of its Lovenox drug. SNY has subsequently said it will continue it’s legal battle without the preliminary injunction. It also made some underhanded remarks about MNTA/NVS’s generic, saying “Sanofi-aventis is committed to making healthcare professionals aware of the complexities related to the biologic composition and manufacturing of Lovenox® so that they can make informed decisions about treatment options for their patients. Pending a final decision on the merits of the underlying complaint, sanofi-aventis will continue to make original enoxaparin (Lovenox®) available to healthcare professionals for their patients.” It sure sounds like the French have gotten feisty since losing Round 1 and they are prepared to take the fight to those filling the prescriptions. Obviously, SNY realizes continuing the legal battle will take many months, but they can try and diminish any sales loss by putting out whatever misinformation they like. Hopefully, Sandoz/NVS is adequately prepared to fight back on the sales and marketing side.

Investors will still have a lot to look forward to with MNTA. NVS 3Q2010 financial results on October 21, will presumably give an indication to generic-Lovenox sales. MNTA has 50% revenue sharing agreement, based on them being the sole generic competition to SNY’s Lovenox. MNTA’s earnings announcement for 3Q2010 will be on November 1. Additionally, MNTA still has an ANDA for Copaxone (M356) with the FDA. They are currently in patent infringement litigation with TEVA over Copaxone, which they are currently awaiting a claims-construction ruling on the merits of TEVA’s patent claims against MNTA.  The expiration of 30-month Hatch-Waxman period pertaining to NVS/MNTA’s Copaxone ANDA ends in February 2011, barring any further litigation efforts from TEVA. Copaxone is leading treatment for multiple sclerosis with global sales in 2009 of over $2.8 billion.

Late last week,  via theflyonthewall.com, analysts at Rodman & Ramshaw “reiterates its view that Momenta Pharmaceuticals (MNTA) should be on major generic and big pharma companies "to-acquire" watch list following the July 23rd approval of the m-Enox ANDA, which validated Momenta's technology. The firm views Novartis (NVS) as the most logical acquirer among big pharma and Teva (TEVA) at the top of the list among generics." They subsequently upped their target price from $24 to $32, following the refusal of a preliminary injunction.

Clearly, if MNTA’s generic Lovenox is the sole generic competitor(TEVA and WPI have pending ANDA’s for generic Lovenox) on the market for a substantial period of time(1 year or greater), NVS will be paying out a lot to money to MNTA. This is also disregaring any potential positive news regarding Copaxone litigation and/or FDA related news regarding their application. Regardless, MNTA appears to have a bright future.

 

Disclosure: No positions.

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