Biotech Values

[floblu14]

May 13, 2010 MNTA OUTPERFORM

COMPANY UPDATE - LEERINK SWANN

MOMENTA PHARMA, INC.

FDA Denies Teva's Citizens Petition, Eliminates Bear Case for
M-356

• Bottom Line: The FDA denied Teva's second Citizen's Petition (CP)
against generic Copaxone approvals within the statutory 180 day review
timeframe. We view this as an incremental positive for MNTA as it may
indicate the FDA's willingness to move forward with the M-356 ANDA
review. Reiterate Outperform rating and $16 fair value in 12 months.

• The FDA denied the specific requests in Teva's CP regarding the
approvability of any glatiramer acetate injection ANDA because it
would be premature to decide on matters which are still in the
process of being reviewed. As laid out in the response letter, Teva
claimed that it is generally impossible for any ANDA sponsor to
demonstrate that its version of the drug contains the "same" active
ingredient as Teva's branded Copaxone due to the product's complexity.

• The agency denied the CP because it has "broad discretion" in
determining whether an ANDA applicant has submitted sufficient
information upon which it can reasonably conclude that the generic drug
product's active ingredient is the "same as" that of the branded version.
"Same active ingredient" also does not mean "complete chemical
identity", according to the FDA and will be determined on a case-by-case
basis.

• The FDA's response letter contained an unusually detailed
explanation as to why the CP was rejected. We believe the FDA's
detailed explanation and language as to how it determines "sameness" of
generic and branded biologics may indicate a new proactive direction of
the agency to move forward with complex generics such as M-356 and
biosimilars in general. This also dispels the bear case that the FDA would
never approve M-356.

• Teva likely submitted this second CP as an additional strategy to
stall MNTA's M-356 ANDA which is currently under review by the
FDA. Recall, an earlier CP claiming generic versions of Copaxone to be
unsafe was rejected in March '09 (see our note from 03/27/2009).

• Next up: Teva and MNTA's patent infringement lawsuit will likely
go to trial in 2H10. MNTA attended a Marksman hearing in 1Q and a
judge ruling is expected anytime this year. We expect this suit to go to trial, although there is a small possibility that summary judgment is granted.

MORE -

http://portal.leerink.com/IRPDocumentViewer/Web/DocumentViewerCache.aspx?docId=2B7370724D5549777553513D&pad=66385631534C2F514E46684C6E524D5A7538762B4C673D3D&userId=365A693175646B6A70546B3D