Biotech Values

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Momenta Seeks to Raise $57M to Fund Follow-on Biologics

[excerpts from Bioworld Today 12/9/2010]

“It is impressive that the deal priced so quickly, given
that it was only announced [Tuesday] evening,” Avik Roy,
health care analyst for Monness, Crespi, Hardt & Co. Inc.,
of New York said in a research note following the pricing.

Roy maintained his “buy” recommendation with a target price of $21 for the stock.

Duane Nash, analyst at WedBush PacGrow Life Sciences
in San Francisco, reiterated his “outperform” rating on
Momenta’s stock and lowered the fair value from $29 to $27
“due to dilution from the announced secondary offering,”
he wrote in a research note. “We continue to believe MNTA
remains signifi cantly undervalued and that the current
share price presents a very attractive opportunity for
investors to acquire shares in a company positioned to
benefi t immensely from the encroachment of generic drugs
and biologics.”

The company plans to use proceeds from the stock
offering to fund the next programs within its pipeline,
Richard Shea, the company’s senior vice president and chief
fi nancial offi cer, told BioWorld Today.
“We’re making investments in follow-on biologics,” he
said. “We believe that will be a very important area for us
over the next few years.”

Because M-Enoxaparin is interchangeable with Lovenox,
“we’ve been able to achieve a signifi cant penetration into
the market,” Shea said. “Our supply chain has the ability to
supply 40 percent to 50 percent of the market, so whatever
we make we can sell, as long as we’re the only generic
product on the market.”

That exclusivity could change overnight. Israel’s Teva
Pharmaceutical Industries Ltd. also has a generic Lovenox
product under FDA review. Last week, Momenta fi led a
patent infringement suit against Teva related to that generic
drug’s production technology. “We’ll just have to see how
that suit develops,” Shea said.