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UPDATE 2-U.S. rejects Momenta copy of Sanofi's drug Lovenox
11:15 a.m. 11/06/2007

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By Lewis Krauskopf and Ben Hirschler

NEW YORK/LONDON, Nov 6 (Reuters) - U.S. regulators have rejected Momenta Pharmaceuticals Inc's (MNTA) generic version of Sanofi-Aventis SA's top-selling thrombosis drug Lovenox, sending Momenta shares into a tailspin and Sanofi climbing.

Momenta said on Tuesday its partner, Sandoz, received a letter from the U.S. Food and Drug Administration saying its application for the product, M-Enoxaparin, was not approvable. Sandoz is the generic drugs division of Novartis AG .

Momenta said the FDA's letter indicated that M-Enoxaparin was rejected because the application did not adequately address concerns about effects on the immune system.

The FDA recommended in its letter that Momenta and Sandoz meet with the agency to determine what additional information should be provided to address this concern.

The news is a major blow for Momenta. The U.S. group had appeared ahead in the race to sell a copy of Lovenox, Sanofi's biggest medicine, which had worldwide sales of 1.94 billion euros ($2.82 billion) in the first nine months of 2007.

Sanofi shares rose 3.9 percent while Momenta opened 46 percent lower on Nasdaq. Novartis shares were little changed.


SECOND BULLET DODGED

It is the second time this year that France's Sanofi, the world's third largest drugmaker, has dodged a bullet from generic competition, after the U.S. patent on its Plavix blood thinner was upheld in June.

"This removes a significant sentiment overhang for Sanofi-Aventis and allows investors to focus on 2008 with significant clinical newsflow coming up, at what we see as an unchallenging valuation," Deutsche Bank analyst Michael Leuchten said in a note.

Lovenox accounts for up to 15 percent of Sanofi's net profits but, in practice, industry analysts had not expected Momenta's generic to win business easily. That is because Lovenox is a large, biological molecule that must be given by injection and is not straightforward to substitute.

Leuchten said a substitutable generic Lovenox now looked increasingly unlikely. There is another generic challenger waiting in the wings, from Teva Pharmaceutical Industries Ltd (TEVA) and Amphastar Pharmaceuticals, but Momenta is generally thought to have the better technology.

Momenta said it was working with Sandoz to address the FDA's questions and determine the information necessary to win approval of M-Enoxaparin.

The FDA's reluctance to clear Momenta's generic version of Lovenox may signal a wider conservatism towards so-called biosimilar medicines, or copies of biotech products.

If so, that could be good news for other companies with important branded biotech drugs in their portfolios, such as Amgen Inc (AMGN) and Roche Holding AG . (editing by John Wallace/Elizabeth Fullerton)