Momenta Pharmaceuticals, Inc. (MNTA)

[mouton29]

Re: MNTA NOLs.

You are confusing NOL carryforwards with credits. A carryforward is just a loss that offsets income. A credit, on the other hand, offsets tax liability. MNTA has a little of both. This distinction appears in the first sentence of the following, where they say they used $192.3 million of their carryforward in 2011 -- if your interpretation were correct, $192.3 million would be the avoided tax.

The Company generated U.S. taxable income during the years ended December 31, 2011 and 2010, and as a result, utilized $192.3 million and $26.3 million, respectively, of its available federal net operating loss carryforwards to offset this income. At December 31, 2011, the Company had federal and state net operating loss carryforwards of $25.9 million and $18.7 million, respectively, available to reduce future taxable income and which will expire at various dates through 2029. Of this amount,approximately $8.3 million of federal and state net operating loss carryforwards relate to stock option deductions for which the related tax benefit will be recognized in equity when realized. At December 31, 2011, the Company had federal and state research and development and other credit carryforwards were $4.9 million and $3.1 million, respectively, available to reduce future tax liabilities and which will expire at various dates beginning in 2017 through 2030.

Also, they list a "deferred tax asset" of $6.561 million; this is roughly the effective tax rate you mention applied to the excess of the $25.9 million carryforward they mention over the $8.3 million that will be recognized in equity when realized.

This is why, on page 67. they say, " Accordingly, we will carry minimal net operating loss carryforwards into 2012 to offset future net taxable income, if any. "