Momenta Pharmaceuticals, Inc. (MNTA)

[DewDiligence]

MNTA diluted share count for valuation purposes:

At 6/30/16, there were 70.7M basic shares outstanding (https://www.sec.gov/Archives/edgar/data/1235010/000123501016000008/mnta0630201610q.htm#s0BCA1FD2CD8E594D92231793B023C9C1 ).

In the prospectus for the 5/19/16 public offering (http://www.sec.gov/Archives/edgar/data/1235010/000104746915004924/a2224849z424b5.htm ), MNTA disclosed 7.9M options issued at an average exercise price of $14.25. Since May 2015, more options have been issued and some options have been exercised; I make the simplifying assumptions that new issuances and exercises roughly offset one another, and hence the 7.9M figure is still usable for valuation purposes. Further, I make the conservative decision to include all of these 7.9M options in my tally, even though some of them are unvested and/or out-of-the-money.

Therefore, my diluted share count for valuation purposes is 78.6M.

(I do not use the “treasury method” of calculating the diluted share count, which reduces the share count according to the price at which options are exercisable, because the straightforward method of counting all options without adjustment gives a more realistic view of the number of shares that would need to be cashed out in a buyout at a typical premium.)