Biotech Values

[DewDiligence]

Momenta Wins In Court But Still Loses

http://www.boston.com/business/technology/biotechnology/articles/2007/02/10

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By Stephen Heuser
February 10, 2007

One of Cambridge's highest-flying young biotechnology companies savored a win in patent court yesterday, but in a perverse twist watched its stock drop 20 percent as Wall Street digested the news.

Momenta Pharmaceuticals Inc., a 150-person firm, is trying to develop a generic version of the blood-thinning drug Lovenox, one of the world's top-selling drugs, with more than $2 billion in annual sales.

Yesterday, Lovenox's maker, French drug giant Sanofi-Aventis SA , said a California judge had thrown out its patent on the drug. The patent had been challenged by two other companies [TEVA and Amphastar] that want to launch generic versions.

An analyst for Deutsche Bank yesterday wrote that the decision "removes the first essential legal obstacle" for Momenta's drug to reach the market.

Although Momenta isn't the only firm trying to make generic Lovenox, many analysts believe its scientific expertise gives it an advantage over competing companies. [What matters, of course, is what the FDA believes on this point and there is not yet any evidence of that.] Momenta was founded in 2001 on technology created at MIT -- a unique way of analyzing the structure of complicated sugars such as Lovenox. Understanding the structure is crucial to developing a copycat version of a drug.

Other obstacles remain, however. The largest is the Food and Drug Administration, which must sign off on any new generic. The agency has not issued guidelines for approving a generic version of a drug as complex as Lovenox. Without guidelines, it is unclear whether such a drug could get approved. Momenta applied to sell generic Lovenox in August 2005 and still has not gotten a decision.

In an interview yesterday, Momenta chief executive Craig Wheeler said talks with the FDA were on track, and he expected to win approval this year.

Yesterday, either because of profit-taking or skepticism about the company's chances with the federal agency, shareholders sold the company's stock. Momenta shares dropped $4.03 or 20 percent, to close at $16.10.
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