Knobias Clip Report (11-06-2007)
Submitted By Knobias ClipReport
MNTA: Shares Plunge on FDA Rejection
Tuesday’s session saw Wall Street retrieve an earlier bounce and rallied into the close as Exxon Mobil gained on record crude oil prices. But not all blue chipper’s gained as Citigroup saw its shares fall again on continued fallout from subprime.
With oil reaching higher and higher and closing in on the $100 psychological resistance level, investors should look again at alternate energy plays with solar being a major focus. Many of the larger solar names such as First Solar Inc. and SunPower Corporation have seen extensive runs without the help of $100 oil.
In the small cap space, one pharmaceutical saw shares decline enormously on some disparaging news for holders.
Momenta Pharmaceuticals (MNTA) is a biotechnology company specializing in the detailed structural analysis of complex mixture drugs. The Company applies its technology to the development of generic versions of complex drug products, as well as to the discovery and development of novel drugs.
Their most advanced product candidate, M-Enoxaparin was designed to be a technology-enabled generic version of Lovenox(r). Momenta’s first novel drug candidate is M118, a rationally engineered anticoagulant specifically designed for acute coronary syndromes. Within the Company’s discovery program, it is seeking to discover and develop novel therapeutics by applying its technology to better understand sugars’ functions in biological processes, with an initial focus in oncology.
On Tuesday, the Company announced that the FDA had denied the approval of their most advanced candidate, the blood clot drug Enoxaparin Sodium. The product was being developed with partner Sandoz, a unit of Novartis AG (NVS).
The FDA’s letter stated that the ANDA was not approvable because the application did not adequately address the potential for immunogenicity of the drug product and recommended that Sandoz and Momenta meet with the Office of Generic Drugs to determine what additional information should be provided to adequately address this concern.
It was noted that Sandoz and Momenta were working together to identify the additional information that is necessary to obtain approval of the ANDA.
Following the announcement, analysts were out in droves updating price targets and giving their take on the prospects of the Company.
In a note to investors, Cowen & Co. analyst Eric Schmidt called this news “surprising” and said that receiving a non-approval letter for an abbreviated new drug application is extremely rare. “We expect investors to be skeptical around Momenta’s entire technology platform, pipeline and complex generic strategy,” Schmidt wrote.
Bear Stearns reiterated an “underperform” rating on Momenta shares after the disclosure and estimates that Momenta’s pipeline is now worth about $2 per share.
At the close on Tuesday, shares had fallen over $7.70 to close at $5.67, down over 57% on 17.58M shares traded. With extreme pessimism over the Company’s future prospects and pipeline from analysts and investors, investors would be wise to watch.
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