Momenta Pharmaceuticals, Inc. (MNTA)

[RockRat]

We all agree with you, I think. The question is: did Amphastar find a work-around for production that still satisfies the FDA criteria for continued approval, and if not, can they successfully overturn the patents?

My own take is that it's better than even Amphastar is infringing, and a crapshoot on overturning Momenta's patents. So my guess is Momenta gets a PI, and Amphastar immediately challenges. But the challenge, however immediate, will actually take years to resolve, with plenty of risk for both sides.

Which is why settlement is expected, though I'm thinking the terms might be more like a 10% royalty. But there are complications. In theory, there could be a negotiated delay, which would, in theory, run afoul of the FTC. I could see Momenta lowering its requested royalty for this concession, if they thought they could get away with it. According to Dew, the FTC has had difficulties in breaking such agreements, so maybe they could. To account for this, the royalty rate once Amphastar is made to launch by the FTC (should this happen) could be prospectively scaled according to how long that legal wrangle takes.

The reason a delayed launch is preferable is that if Amphastar launches under any circumstances, two bad things happen for Momenta: 1) the reduced royalty rate from Sandoz, and 2) the near certain entry of an AG from Sanofi.

Another complication is that it's unclear what Sandoz, also a party to this, wants. Did we conclude that the reduced revenue to them from additional generics was offset by not having to pay Momenta nearly as much? Are they in negotiations with Momenta for the FoB program, and wouldn't that affect their stance on this litigation?

The outcome of tomorrow's meeting seems pretty binary to me. If no PI issues, we could easily see Momenta's share price eyeballing high single digits. I have a bit of powder dry should that happen, as that would price in just about every conceivable downside scenario

Regards, RockRat