Momenta Pharmaceuticals, Inc. (MNTA)

[DewDiligence]

Re: Generic-Copaxone sales arithmetic

US Copaxone sales—including the 20mg and 40mg (thrice-weekly) formulations—are running at an annualized rate of $3.3B (#msg-101423274).

According to Teva, the 40mg formulation had 31% of total US Copaxone prescriptions and 50% of new Copaxone prescriptions at the end of 1Q14*; these figures suggest that the 40mg’s share of total US Copaxone prescriptions is likely to end up at 40-50%, so let’s take the midpoint and say 45%. The price difference between the branded 40mg formulation and the branded 20mg formulation is too small to worry about in this kind of modeling, so we can simply say that a 45% share of a $3.3B annual market is about $1.5B.

To be conservative, let’s assume that no 40mg patients switch back to the 20mg formulation when a generic becomes available. In that case, if NVS/MNTA have the only generic on the US market and the generic attains a 40% share of the 20mg portion of the market and is priced at a 30% discount to branded 20mg Copaxone, NVS/MNTA will have annualized Copaxone sales of $1.5B(.40)(.70) = $420M.

*Source: http://seekingalpha.com/article/2185153-teva-pharmaceuticals-ceo-discusses-q1-2014-results-earnings-call-transcript