Momenta's generic Lovenox sales exceed expectations Print E-mail
By Patrick Crutcher   
Tuesday, 19 April 2011 15:24

As we reported earlier, we had high expectations for sales of Momenta Pharmaceuticals' generic Lovenox, but the actual sales numbers are above and beyond those.

Yesterday morning, Novartis(NYSE: NVS), reported $247 million in Lovenox sales for Q1 2011. We previously estimated somewhere around $200-225 million in sales. That's 10% above our expectations on the high end. Momenta Pharmaceuticals (NASDAQ: MNTA) will report earnings on May 5th. 
 Based on previous margins and operating expenses, this could be mean somewhere between $70-75 million in revenue to Momenta. Consider that in Q4 2010, they received around $58 million in revenue. Based on $70M, that's a 20% jump in revenue. A conservative estimate for their earnings per share(EPS) would be around $0.9 on net income of close to $48 million. That is a very good quarter by any standards, especially for a smallcap biotech company.  This revenue will continue to add more cash to their balance sheet, which already has an effective cash balance of $203 million at end of 2010 and no debt.


We have stuck with Momenta's story and it has paid off. In our view, MNTA is still vastly undervalued. With these type of revenues sustained throughout 2011, Momenta could see EPS of around $3.50 or higher for fiscal year 2011. We can't even think of another biotech stock under $1 billion in marketcap that is doing anything close to this in revenue. In a recent note out of Cowen & Co., they reiterated their belief that "Momenta's M-Enoxaprin is worth mid $20's to shares", Teva’s Lovenox ANDA is not a real threat and the possibility of a settlement in the Copaxone litigation with Momenta. Also, consider that TEVA recently stated they won't comment upon their ANDA until they get approval. Now that's a 180 degree turn from their previous pumping back in July about "being close". It suggests to us very serious problems with their Lovenox program and could spell the end of it; a cold shutdown so to speak. All of those reasons fully support our belief that Momenta is undervalued and should be well north of $20. As usual, we will keep you updated on the goings on about at Momenta.

Disclosure: Long MNTA


Recent coverage -


Novartis First Quarter 2011 results (PDF)

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