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Morningstar | Momenta Is Transitioning to Innovative Rare Diseases, but Has Yet to Establish a Moat

Momenta's strategy is transitioning as the firm moves from complex generics and biosimilars into novel, branded autoimmune drugs, but its strong experience in characterizing complex proteins makes it a viable industry player and possible takeover target.Complex generics have faced higher development, manufacturing, and regulatory hurdles, which can reduce competition and pricing pressure relative to typical generic markets. However, Momenta and Sandoz's generic version of Sanofi's anticoagulant Lovenox, which was approved in 2010, saw short-lived success; Novartis withdrew the product from the market in 2018 because of expensive manufacturing contracts that weighed on profitability after competitors entered the market. Momenta and Sandoz also launched a 20 mg generic version of Teva's multiple sclerosis drug Copaxone in 2015, marketed as Glatopa; however, Teva's conversion of Copaxone patients to a newer and less frequently injected 40 mg formulation and Mylan's 40 mg generic launch in 2017 were headwinds for Momenta's own 40 mg product launch in 2018. Momenta has halted further generic and biosimilar pipeline investment, but has two advanced programs remaining, including a fully owned Humira biosimilar (ready for filing, with potential launch following approval in Europe and in November 2023 in the U.S.) as well as a phase 3 Eylea biosimilar partnered with Mylan (likely launch 2023). We expect Momenta to partner its Humira biosimilar and see profit shares for both programs. Momenta has two wholly owned novel pipeline candidates, M281 and M254, in midstage testing in autoimmune indications, as well as CSL-partnered M230 in a phase 1 trial. While the FcRn antibody pipeline is quite crowded, M281's fetal maternal program adds a unique angle and potential faster route to market. Data in myasthenia gravis (2020) and the fetal maternal indication (2021) could put the firm in a strong position, despite Alexion's accelerating development programs and Argenx's potentially first-in-class program. Fc multimer M230 and modified immunoglobulin M254 could also compete in a more than $4 billion autoimmune immunoglobulin market.