Momenta Pharma Could Face Pressure Following Approval Of Mylan's Generic Copaxone

The U.S. Food and Drug Administration's approval of Mylan N.V. (NASDAQ: MYL)'s generic version of Copaxone for the treatment of relapsing multiple sclerosis should be seen as a "clear negative" for Momenta Pharmaceuticals, Inc. (NASDAQ: MNTA)'s Glatopa franchise, analysts at Baird said. The firm's Thomas Shrader downgraded Momenta's stock rating from Buy to Hold with a price target slashed from $22 to $15.

Mylan's approval win represents the first ever generic version of Teva Pharmaceutical Industries Ltd (ADR) (NYSE: TEVA)'s Copaxone and came at a time when Momenta's Glatopa remains under FDA review, Shrader commented in his downgrade note Wednesday. In fact, Mylan will begin shipping its therapy to patients very shortly even though the company deferred its generic Copaxone revenue guidance to next year (see Shrader's track record here).

As a result of the approval of Mylan's drug, Momenta's Glatopa franchise will see heightened competition should its therapy be approved, the analyst noted. The Glatopa franchise also accounts for the primary revenue generator, which is the main contributing factor for the downgrade.

"Mylan's decision to launch at-risk is consistent with our belief that the district court's Paragraph IV ruling, which invalidated key patents protecting 40 mg/mL Copaxone, would hold during Teva's appeal with a final ruling expected in early 2018," Shrader also commented. "We anticipate Momenta and partner Sandoz to do the same thing as soon as their 40 mg/mL generic Copaxone gets approved. In regards to the 180-day exclusivity, the FDA has not made a formal determination and we believe Momenta to be one of the first filers and do not consider this as an issue."

Bottom line, the FDA's announcement is a "clear negative" for Momenta's Glatopa franchise, and the company's future Glatopa revenue could be depressed amid increased competition and price erosion.

In Thursday's pre-market session, Momenta shares were down 4.3 percent at $14.45.

Related Links:

Mylan And Teva And Copaxone, Explained

What Approval For Generic Copaxone Means For Mylan