Momenta Pharmaceuticals, Inc. (MNTA)

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MNTA: TA of The fierce battle with TEVA

(These are just my observations from a TA point of view.)

From a technical perspective it is clear that MNTA and TEVA are locked in a fierce battle. As we all know, TEVA's "minor deficiency" announcement caused MNTA to hit an 8-month low and the lowest point since mEnoxaparin was approved. Perhaps this is why Cramer stated "At the end of the day the fate of MNTA is in the hands of TEVA". But on the flip side I stated "A portion of TEVA's fate is in the hands of MNTA" because generally (at least for the past 8 months) positive events for one company causes a low PPS for the other. Refer to the chart below.

FWIW, IMO, MNTA is still in a long term upward trajectory and this is the best shape that MNTA's technicals have been in for the past 5 years wheras TEVA's technicals are in the worst shape they have been in for the past 12 years and looks like it will be moving flat at best for the foreseeable future. I think TEVA will be stuck to the $50 level with gorilla glue.

Now this does not mean that MNTA is going to be over the $26 high it acheived after mEnox approval anytime soon. It might slowly grind upward in Area C of my long term chart (#msg-61282719) unless a major positive event occurs -or- TEVA pulls a tEnox approved rabbit out of the hat (which might cause MNTA to drop below it's 3+ year support trendline). As you may recall, GS put a $15 price target on MNTA and Cramer has seemed to side with his buddies there - further speculation that MNTA will be stuck in Area C. Going forward, with TEVA's tEnoxaparin credibility spent, how much do you want to bet that they will use Copaxone as the next club to beat MNTA down with? (Generic Copaxone is not acheivable without trials, we're experts in Copaxone after all, we're confident our patents are strong, we're developing other more effective dosages, every trick in the book similar to tEnox spin/BS).

This is why I believe that barring mCopaxone approval, strong FOB progress/partnership may be what is needed to move MNTA's PPS significantly upward and out of Area C. FOB is an area which TEVA will not be able to have any effect with their propaganda.

One last thing I'd like to mention is regarding a long-term technical indicator I use. Although technicals work best when all indicators and charts are working in unison and showing the same thing, there is a long-term indicator that is flashing that MNTA could be in the $18 - $20 range in 2 months. This is just one indicator and other indicators do not show this although they show that it is possible.



(Again, only my observations from a technical point of view. Of course there are other factors that affect each company's stock, for ex. TEVA's deal with P&G. Just pointing out that there may be a correlation between the highs and lows of MNTA and TEVA).