Momenta Pharmaceuticals, Inc. (MNTA)

[DewDiligence]

‘Cheat sheet’ re MNTA’s NOL’s (revised):

At 12/31/11, MNTA had $25.9M of NOL carryforwards for federal purposes (and a somewhat smaller amount for Massachusetts purposes), as shown on page 96 of the 2011 10-K (http://www.sec.gov/Archives/edgar/data/1235010/000104746912001705/a2207556z10-k.htm#fa75401_item_8._financial_statements_and_supplementary_data ).

Assuming that MNTA’s cumulative GAAP net loss during 1Q12 and 2Q12 was approximately $10M, MNTA had approximately $36M of NOL’s to shield future income at the end of 2Q12.

The statutory federal + state income-tax rate MNTA would have paid in 2011 if not for the NOL’s was 39.4%. (This is calculated by dividing the $71.1M of federal and state taxes that would have been payable at the statutory rate [from table on page 96 of the 2011 10-K] by the 2011 net income of $180.3M.) If we assume the same statutory rate in the future, then the $36M of NOL’s calculated above will save MNTA approximately $14M in federal and state income taxes.

Thus, for all practical purposes, MNTA’s NOL’s are not an asset with significant value in the overall scheme of things.