Biotech Values

[DewDiligence]

Why MNTA?

MNTA obviously has several moving parts. Any of them in particular driving your belief that the stock is undervalued? (I'm personally intrigued by their lovenox damages suit).

Here are a few reasons:

• The potential judgment or settlement of the Lovenox patent case is at the top of my list. Technically, there is no “damages suit” in progress, but rather the likelihood that the Appellate Court will rule that the Hatch-Waxman Safe Harbor doesn’t protect Amphastar from infringing MNTA’s Lovenox patent, and hence will remand the case to the District Court for a trial. (Almost nobody has ascribed any value to the potential damages from a Lovenox judgment or settlement, and many investors don’t even realize the Lovenox patent case has never gone to trial on the merits.)

• MNTA says it expects to ink a new FoB partnership in 2H15, and MNTA has a track record of completing business deals within the guided timeframe (having done so with the Baxter deal announced in Dec 2011).

• The Glatopa launch is going well, according to NVS.

• MYL acknowledged on its most recent CC that it has work to do before resubmitting its own 20mg Copaxone ANDA (#msg-115996641). Thus, it seems reasonable to expect that NVS/MNTA will have the only generic on the market for a while.

• MNTA’s being the sole applicant to obtain FDA approval for generic 20mg Copaxone (a complex peptide drug) supports the thesis that MNTA, in due course, can be a meaningful player in the FoB arena, particularly with respect to interchangeable FoBs.

• Today’s news on the USPTO IPR regarding Teva’s 40mg Copaxone patents makes it pretty likely that MNTA can launch a generic version of Teva’s 40mg Copaxone in Jan 2017 (#msg-116493180, #msg-116497178).

• MNTA has ever-present buyout vig. My guess is that the BoD would seriously consider an offer that values the business per se at $2.5B (fully-diluted). The ~$400M of cash on MNTA’s balance sheet makes a $2.5B EV equate to a $2.9B market cap, which is about $38/sh.