Momenta Q3 Loss Wider-Than-Expected, Revenues Miss

Momenta Pharmaceuticals Inc.MNTA reported a loss of 44 cents per share in the third quarter of 2015, much wider than the Zacks Consensus Estimate of a loss of 19 cents per share but narrower than the year-ago loss of 56 cents per share.

Momenta Pharmaceuticals Inc. (MNTA) - Earnings Surprise | FindTheCompany

Revenues, which jumped 47.8% to $13.8 million from the year-ago quarter, missed the Zacks Consensus Estimate of $27 million. Total revenues comprised product revenues ($8.7 million), and research and development revenues ($5.1 million).

The Quarter in Detail

In the third quarter of 2015, Momenta recorded $8.7 million in product revenues from Sandoz's Glatopa (generic version of Teva Pharmaceutical Industries Limited's TEVA Copaxone 20mg) sales, reflecting a decline from the second quarter of 2015 due to inventory destocking. Momenta reported that Glatopa scripts represented about 25% - 30% of the once daily Copaxone market.

We note that Sandoz's abbreviated new drug application (ANDA) for the 40 mg thrice-weekly formulation of Copaxone is currently under FDA review. The company believes that this formulation can be launched as early as the first quarter of 2017.

Research and development expenses came in at $31.7 million, up 15.4% from the year-ago quarter reflecting higher expenses related to the autoimmune programs, expenses related to necuparanib study and share-based compensation expenses.

General and administrative expenses were $12.5 million, up 12.2% year over year driven by share-based compensation expenses and professional fees.

Pipeline Update

Momenta, in collaboration with Baxalta Incorporated BXLT initiated a pivotal study in patients with chronic plaque psoriasis for M923, a biosimilar version of Humira. The first regulatory submission is scheduled for 2017 with the first commercial launch expected in 2018.

Meanwhile, Momenta continues to enrol patients in its phase II study on necuparanib which is being evaluated in combination with Abraxane and Gemzar for pancreatic cancer. The company said that patient recruitment has been a bit slower than expected due to which patient enrollment will not be completed by the end of the first quarter as previously targeted. However, Momenta still expects top-line data from this study in the first half of 2017.

Momenta expects operating expenses (excluding stock-based compensation and net of collaborative revenues) in the range of $40 million - $42 million in the fourth quarter of 2015.

Our Take

Momenta's third-quarter 2015 results were disappointing with the company posting a wider-than-expected loss and revenues coming in well below expectations. However, we note that Glatopa revenues were impacted by inventory destocking. The situation should improve from the fourth quarter. Meanwhile, we are encouraged by the company's progress with its biosimilars pipeline.

Momenta carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Actelion Ltd. ALIOF , carrying a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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