Momenta Pharmaceuticals, Inc. (MNTA)

[Rocky3]

For instance, if you conservatively figure that NVS will sell about $300M of US Lovenox annually in the new multi-player arena (SNY, NVS, Amphastar/WPI, and SNY AG), then the NPV of the Lovenox royalty stream for MNTA on a pre-tax basis is also about $300M.

And if the number is as low as $100MM (or lower), what is the royalty stream worth? My view is that it is basicly worthless as long as MNTA has no other income and the royalty at $4MM per quarter simply reduces the cash burn by 20% or less. Of course this assumes that competition stays the same or gets worse (which is what usually happens when price competition gets going) and that the appeals court case does not go in MNTA's favor. Again, my view is that the case "should" go in MNTA's favor, but I have been told that it always better to be defending a decision than trying to have one reversed.

There may be lots of opportunity to buy at lower numbers. I think that I will keep selling volatility, even though the implied numbers are much more normal now and there is significant risk that I will end up owning a lot more shares. Still willing to take the risk on mCop by 2015.

JMO.