Momenta Pharma's M-Enoxaparin: Timing Uncertain, Approval Likely

Momenta Pharma (NASDAQ: MNTA) presented at the 2009 UBS Global Life Sciences Conference about two weeks ago and outlined several key developments for the company, including an update on the FDA status for M-Enoxaparin.

In late September, the company raised net proceeds of approximately $46.7 million through a public offering of 4.6 million shares of common at $10.75 per share (compared to a current share price hovering around $9.50). Momenta provided guidance for ending the year with about $90-100 million in cash, providing adequate liquidity for 18-24 months.

However, the most important development is a potential FDA decision for the long-standing abbreviated new drug application (ANDA) for M-Enoxaparin as a generic equivalent to the multi-billion dollar blood thinner Lovenox.

In late 2007, all three applicants with pending ANDAs for generic forms of Lovenox received a request for more information from the FDA regarding the potential for immunogenicity of their products. Momenta’s partner, the Sandoz division of Novartis (NYSE: NVS), submitted a major amendment on 9/26/08 for the M-Enoxaparin ANDA to address these concerns by the Agency. Most recently, the FDA conducted reviews of heparin suppliers in China to ensure a safe supply chain as part of the manufacturing process.

Sandoz has four heparin suppliers in China and a processing facility in Austria that have successfully completed inspections by the Agency. In addition, no patent litigation or other legal hurdles remain for Sandoz to launch M-Enoxaparin following FDA approval of the ANDA. Because the Generic Division of the FDA does not issue PDUFA action dates, the timing for an M-Enoxaparin decision is uncertain. However, Momenta feels that the Agency has all the necessary information required to make a final decision on the ANDA and believes a response from the FDA is possible before year-end.

The major uncertainty for financial projections this year is the status and timing of the M-Enoxaparin ANDA approval and launch. MNTA is set receive much higher royalties if M-Enoxaparin is the only generic form of Lovenox which is approved, as opposed to much lower royalties (e.g. 10%-15%) if competing ANDAs by Amphastar / Watson (NYSE: WPI) and Teva Pharma (NASDAQ: TEVA) are approved. Also, Sanofi-Aventis (NYSE: SNY) may choose to launch an authorized generic of Lovenox if one or more of the ANDAs are approved. The InvestorsHub page / forum for Momenta is an excellent resource for in-depth and current overviews on the company, including several valuation scenarios for the stock.

Momenta / Sandoz also have a pending ANDA for a generic version (M356) of Teva’s multiple sclerosis drug Copaxone (glatiramer acetate injection) ($2.3B in sales for 2008), which was accepted for review by the FDA on 7/11/08. The Generic Drug Division of the FDA does not issue decision date deadlines and Sandoz is currently involved in litigation with TEVA over M356 as a generic equivalent that was filed with a Paragraph IV Certification / patent challenge.

In April 2009, the FDA declined to review the citizen petition submitted by TEVA asking the agency not to accept applications for generic versions of the Copaxone multiple sclerosis treatment. The Agency informed TEVA that it would be “premature and inappropriate” to review the Copaxone petition filed last September. A product cannot be launched until after the 30-month litigation stay (February 2011), and then may be launched at risk if the ANDA is approved.

On 9/14/09, Mylan (NYSE: MYL) announced that the FDA accepted the company’s ANDA for a generic equivalent of Copaxone for the treatment of multiple sclerosis (NYSE:MS).

In late September, Momenta reported the full results for its proprietary anti-coagulant (M118) in a Phase 2 EMINENCE trial that met its goal of supporting the feasibility and future clinical development of the compound in patients with coronary artery disease. M-118 represents the next-generation version of low molecular weight heparin (LMWH) blood thinners such as Lovenox. In June, MNTA announced top-line results from this study, which is a Phase 2a trial of its novel anticoagulant that enrolled approximately 500 patients undergoing percutaneous coronary intervention (PCI).

The primary analysis in the study provided evidence of non-inferiority of the combined M118 group (combining all three doses) as compared to the UFH (unfractionated heparin) group within the parameters of the prospectively defined analysis. The observed incidence of the composite endpoint was lower in all M118 treatment groups than in the UFH group; however it should be noted that the study was not designed or powered to detect statistically significant differences between treatments. The incidence of serious and non-serious adverse events was comparable in all treatment groups.

The final opportunity for Momenta lies in FOB products with several key elements to the strategy, including: global scale with partners such as Sandoz, establishing high-quality / low-cost manufacturing partners, the ability to differentiate FOB products from competitors, and achieving bio-equivalent or bio-better products rather than bio-similar products. Momenta will apply their technology platform to characterize highly complex biological agents and reverse engineer the production process to generate equivalent or improved complex biological compounds rather than products which are merely similar.

Momenta should have an inside track on its ANDA for Lovenox after previously working closely with the FDA on the tainted heparin crisis and their proprietary drug candidate M-118 serves as another potential catalyst in the form of a development / commercialization partnership opportunity. Legislation for FOB is not required for the two pending ANDAs (Lovenox, Copaxone) or the proprietary blood thinner M-118, but would increase the value of the company’s technology platform by providing a defined path to commercialization for this class of products.

Disclosure: Long MNTA.