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Momenta (MNTA) Up 10% Since Last Earnings Report: Can It Continue?

Zacks Equity Research

A month has gone by since the last earnings report for Momenta Pharmaceuticals (MNTA). Shares have added about 10% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Momenta due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Momenta Q2 Loss Wider Than Expected, Revenues Miss

The company reported a loss of $1.16 per share in the quarter, wider than the Zacks Consensus Estimate of a loss of 42 cents and the year-ago quarter’s loss of 91 cents.

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Revenues in the quarter came in at $5.2 million, which declined from $13.0 million in the year-ago quarter and missed the Zacks Consensus Estimate of $9 million.

Quarter in Detail

Momenta’s top line comprises product revenues of $3.3 million from Sandoz’s sales of Glatopa, a generic version of Copaxone (20 mg), which decreased from $11.8 million in the year-ago quarter due to increasing competition from Mylan’s entry into the Copaxone market.

Research and development revenues came in at $1.8 million compared with $1.3 million in the year-ago quarter.

Research and development expenses came in at $32.1 million, up from $31.3 million in the year-ago quarter, due to lower personnel costs.

General and administrative expenses were $46.6 million, up 107% year over year due to $21.0 million paid to Amphastar in June 2019.

Pipeline Update

Momenta’s novel auto-immune portfolio includes M230, a Selective Immunomodulator of Fc receptors (SIF3); Nipocalimab (M281), an anti-FcRn monoclonal antibody; and M254, a hypersialylated immunoglobulin designed as a high potency alternative for intravenous immunoglobulin (IVIg).

Momenta recently commenced an adaptive phase II/III clinical study of nipocalimab in warm autoimmune hemolyticannemia (wAIHA). The FDA accepted its Investigational New Drug (IND) application for the same and granted it Fast Track designation. Clinical sites are currently being activated and patient recruitment is underway. Momenta expects to report top-line data from this study by the end of 2021. Vivacity-MG, the phase II study of nipocalimab in generalized myasthenia gravis (gMG), continues to open sites and enroll patients. The top-line data is expected in the second or third quarter of 2020.

Unity, the phase II study of nipocalimab in hemolytic disease of the fetus and newborn (HDFN), continues to open sites and enroll patients. Top-line data is expected in 2021. The candidate has been granted Fast Track designation by the FDA for this indication.

In January 2019, Momenta announced that the first subject was dosed in the phase I/II clinical trial of M254 in immune thrombocytopenia (ITP). The multi-part study has completed Part A, which evaluated M254 in a single ascending dose (SAD) cohort of healthy volunteers, and has advanced into Part B, which will evaluate M254 in a SAD cohort of ITP patients. Parts C and D include a randomized cross-over study comparing M254 to IVIg and a multiple ascending dose (MAD) study of M254, respectively. Enrollment for this trial is ongoing and preliminary data is expected in the first half of 2020.

The phase I trial on M230 in healthy volunteers to evaluate the safety and tolerability is ongoing. Momenta’s partner, CSL, expects to complete the phase I study by the end of 2019.

Momenta has ceased active development of M923, a fully-owned proposed biosimilar to AbbVie’s Humira, due to changes in the market opportunity associated with the drug’s patent litigation settlements. Meanwhile, M710, which is a proposed biosimilar to Regeneron’s Eylea, is being developed in collaboration with Mylan.

2019 Guidance

Momenta expects 2019 expenses to be $45-$55 million.  

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates. The consensus estimate has shifted -22.13% due to these changes.

VGM Scores

Currently, Momenta has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Momenta has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.


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