Replies to post #111896 on Biotech Values

[jbog]

While Wedbush is declaring that Momenta is undervalued at this point it seems obvious that the street has put Momenta in the exact position of any major pharma who's about to lose one of their main products to generic competition. PFE today is priced at about 7X forward earnings, mainly because of the upcoming Lipitor expiration.

It seems that unless the FDA outright rejects Teva and Amphastar's Enox application (very unlikely), Momenta will not receive the proper credit.

It's now all up to the other events to carry this stock forward. It seems that Copax is just as valuable to Mnta's stock price as Enox is at this point. Any Copax setback would hurt.

[10nisman]

Wedbush probably expects MNTA to reverse the balance-sheet offset to the NOL’s and run the deferred-tax asset on the balance sheet through the income statement in one fell swoop, which will encourage the sell-side analysts to ignore this non-recurring gain and model EPS on a fully-taxed basis.

I would be very surprised if E&Y allows a complete reversal of the valuation allowance since there is enough uncertainty surrounding MNTA's ability to fully use the NOL's. I can understand modeling on a fully tax basis however does it really make sense when you expect the company to only have four quarters of positive income and the company's NOLs exceed the estimated total income? In addition, it appears Wedbush has understated the quarterly net cash flow balances in 2011 by their modeled estimated tax liability.

10nis

[zipjet]

Wedbush probably expects MNTA to reverse the balance-sheet offset to the NOL’s and run the deferred-tax asset on the balance sheet through the income statement in one fell swoop, which will encourage the sell-side analysts to ignore this non-recurring gain and model EPS on a fully-taxed basis.

Given the tL any-day overhang, I would not do that.

ij