Momenta Pharmaceuticals, Inc.
Feb 21, 2017

Momenta Pharmaceuticals Reports Fourth Quarter and Year End 2016 Financial Results

CAMBRIDGE, Mass., Feb. 21, 2017 (GLOBE NEWSWIRE) -- Momenta Pharmaceuticals, Inc. (Nasdaq:MNTA) today reported its financial results for the fourth quarter and year ended December 31, 2016.

For the fourth quarter of 2016, the Company reported total revenues of $34.2 million, including $15.8 million in product revenues from Sandoz's sales of Glatopa® 20 mg (glatiramer acetate injection), net of a deduction of $3.6 million for reimbursement to Sandoz of the Company's share of Glatopa-related legal expenses. For the year ended December 31, 2016, the Company reported total revenues of $109.6 million, including $74.6 million in product revenues from Sandoz's sales of Glatopa 20 mg, net a deduction of $3.6 million for reimbursement to Sandoz of the Company's share of Glatopa-related legal expenses. Momenta reported net income of $41.5 million, or $0.60 per share for the fourth quarter of 2016, compared to a net loss of $(29.2) million, or $(0.43) per share for the same period in 2015. For the year ended December 31, 2016, the Company reported a net loss of $(21.0) million, or $(0.31) per share compared to a net loss of $(83.3) million, or $(1.32) per share for the same period in 2015. At December 31, 2016, the Company had cash, cash equivalents, and marketable securities of $353.2 million compared to $350.0 million at December 31, 2015.

"In 2016, Momenta reported significant advances across our portfolio. In early January 2017, we announced a significant research collaboration and license agreement with CSL for M230, our SIF3 novel therapeutic product candidate, and potential future Fc multimer programs. We also announced an agreement with Shire for the early return of full rights to the M923 program, our biosimilar HUMIRA® candidate. We were also pleased by the District Court's decision to invalidate the four method of use patents litigated by Teva to block Sandoz's potential launch of our Glatopa 40 mg product," said Craig A. Wheeler, President and Chief Executive Officer of Momenta Pharmaceuticals. "We are fully committed to work with Sandoz and Pfizer to resolve the recently announced warning letter. With the potential for the approval and launch of Glatopa 40 mg and with multiple data readouts expected across our biosimilar and novel programs this year, we believe 2017 could be a transformative year for Momenta."

Fourth Quarter Highlights and Recent Events

Complex Generics:

Glatopa 20 mg: First FDA-approved, substitutable generic daily COPAXONE® 20 mg for patients with relapsing forms of multiple sclerosis developed in collaboration with Sandoz

Glatopa 40 mg: Designed to be a generic version of three-times-a-week COPAXONE® 40 mg (glatiramer acetate injection) for patients with relapsing forms of multiple sclerosis developed in collaboration with Sandoz

Biosimilars:

M923: a fully-owned proposed biosimilar to HUMIRA® (adalimumab)

M834: a proposed biosimilar to ORENCIA® (abatacept) being developed in collaboration with Mylan

M710: a biosimilar candidate being developed in collaboration with Mylan

Novel Drugs for Autoimmune Indications:

Momenta's novel autoimmune portfolio includes two recombinant molecules: M230, a Selective Immunomodulator of Fc receptors (SIF3) and M281, an anti-FcRn monoclonal antibody. Momenta is also developing a hyper-sialylated IVIg (M254) as a potential high potency version of IVIg that is currently in pre-clinical development.

M230 (SIF3): a Selective Immunomodulator of Fc receptors

M281 (anti-FcRn): a fully human monoclonal antibody (mAb) targeting the neonatal Fc receptor (FcRn)

Fourth Quarter and Year End 2016 Financial Results

Total revenues for the fourth quarter of 2016 were $34.2 million compared to $22.4 million for the same period in 2015. For the fourth quarter of 2016, the Company recorded $15.8 million in product revenues from Sandoz's sales of Glatopa 20 mg reflecting $19.4 million in profit share, net of a deduction of $3.6 million for reimbursement to Sandoz of the Company's share of Glatopa-related legal expenses, compared to $15.6 million for the same period in 2015. Research and development revenue for the fourth quarter of 2016 of $18.4 million includes $14.6 million of collaborative revenue representing the remaining unamortized balance of the $40.0 million upfront and license payments from Baxalta. Research and development revenue for the same period in 2015 of $4.6 million includes $2.4 million of amortization of Baxalta's upfront and license payments.

For the year ended December 31, 2016, total revenues were $109.6 million compared to $89.7 million for 2015. Total revenues for full year 2016 include $74.6 million in product revenue earned from Sandoz's sales of Glatopa 20 mg, net a deduction of $3.6 million in reimbursement to Sandoz of the Company's share of Glatopa-related legal expenses, compared to $43.4 million in product revenue earned from Sandoz's sales of Glatopa 20 mg for the full year 2015, net of a deduction of $9.1 million in reimbursement to Sandoz of the Company's share of Glatopa-related legal expenses. The increase in product revenues of $31.2 million, or 72%, from 2015 to 2016 was primarily due to a higher number of Glatopa 20 mg units sold. Research and development revenue for 2016 of $35.0 million includes $22.0 million of collaborative revenue representing the remaining unamortized balance of the $40.0 million upfront and license payments from Baxalta. Research and development revenue for 2015 of $41.1 million includes $20.0 million in milestone payments earned upon sole FDA approval and first commercial sale of Glatopa 20 mg.

Research and development expenses for the fourth quarter of 2016 were $26.4 million, compared to $37.6 million for the same period in 2015. The decrease of $11.2 million, or 30%, from the 2015 period was due to decreases of $6.8 million for Mylan's 50% share of biosimilar collaboration costs, and $3.3 million due to the discontinuation of the necuparanib development program. For the year ended December 31, 2016, research and development expenses were $119.9 million compared to $126.0 million for the year ended 2015. The decrease of $6.1 million, or 5%, in research and development expenses from 2015 to 2016 resulted from a decrease of $26.5 million for Mylan's 50% share of biosimilar collaboration costs, partially offset by increases of $11.9 million in third-party research, process development, and nonclinical study costs to advance our biosimilar and novel autoimmune programs; $4.9 million in personnel-related expenses, of which $2.5 million is due to increased headcount and $2.4 million is driven by stock compensation; and $2.9 million in costs for the Phase 1 clinical studies of M281 and M834.

General and administrative expenses for the quarter ended December 31, 2016 were $18.2 million, compared with $14.4 million for the same period in 2015. The increase of $3.8 million, or 26%, from the 2015 period was primarily due to increases of $1.5 million in personnel-related expenses and $2.1 million in legal and professional fees. For the year ended December 31, 2016, general and administrative expenses were $64.5 million, compared to $48.1 million for the year ended 2015. The increase of $16.4 million, or 34%, resulted from increases of $9.6 million in personnel-related expenses, of which $5.1 million is due to increased headcount and $4.5 million is driven by stock compensation, and $7.2 million in professional fees primarily for legal, consulting and recruiting costs. The increases were offset by a decrease of $1.3 million for Mylan's 50% share of biosimilar collaboration costs.

Other Income for the fourth quarter of 2016 was $51.9 million, compared to $0.4 million for the same period in 2015. Other Income in the fourth quarter of 2016 includes $51.2 million from the M923 Asset Return and Termination Agreement with Baxalta, a wholly-owned subsidiary of Shire plc. The $51.2 million payment, received in January of 2017, is intended to fund Momenta's estimated costs of performing the development activities that would have been performed by Shire through the original termination date of September 27, 2017. For the full year 2016 Other Income was $53.7 million compared to $1.1 million in 2015.

At December 31, 2016, the Company had cash, cash equivalents, and marketable securities of $353.2 million compared to $350.0 million at December 31, 2015. The year-end cash balance excludes the receipt of a $51.2 million payment from Shire in January 2017 and a $50.0 million upfront payment from CSL that the Company expects to receive in the first quarter of 2017. Current cash balances are expected to be primarily used to fund the Company's pipeline, operations and research activities.

Financial Guidance

Momenta provides non-GAAP operating expense guidance, which it believes can enhance an overall understanding of its financial performance when considered together with GAAP figures. Refer to the section of this press release below entitled "Non-GAAP Financial Information and Other Disclosures" for further discussion of this subject.

Non-GAAP operating expense is total operating expenses (which excludes collaboration expenses reimbursable by Mylan), less stock-based compensation expense and collaboration expenses incurred by the Company that are reimbursable by Sandoz. Today, Momenta provided non-GAAP operating expense guidance of approximately $200 - $240 million for 2017.  This guidance includes approximately $55 million of spending on M923 that will now be included in the Company's 2017 operating expenses. Of the $55 million, $51 million of the expense has already been paid by Shire as part of the termination agreement. Non-GAAP operating expense in the first quarter of 2017 is expected to be $50 - $60 million. The quarterly recognition of collaborative revenues under the Company's collaboration with Mylan is expected to be approximately $2.0 million per quarter. Based on the Asset Return and Termination Agreement with Baxalta, the Company recognized the full balance of its residual deferred revenues from that agreement in the fourth quarter of 2016 and will not recognize revenues from that agreement on a go-forward basis.

Non-GAAP Financial Information and Other Disclosures

Momenta uses a non-GAAP financial measure, non-GAAP operating expense, to provide operating expense guidance. Momenta believes this non-GAAP financial measure is useful to investors because it provides greater transparency regarding Momenta's operating performance and excludes non-cash stock compensation expense and is net of collaborative reimbursement revenues from Sandoz. This non-GAAP financial measure should not be considered an alternative to GAAP total operating expense and should not be considered a measure of Momenta's liquidity. Non-GAAP financial measures should not be considered as substitutes for measures calculated in accordance with GAAP and should only be used to supplement an understanding of Momenta's operating results as reported under GAAP. Momenta has not provided a GAAP reconciliation for its forward-looking non-GAAP annual operating expense because Momenta cannot reliably predict without unreasonable efforts the timing or amount of the factors that substantially contribute to the projection of stock compensation expense, which is excluded from the forward-looking non-GAAP financial measure. The Company has provided the anticipated reconciling information that is available without unreasonable effort in the section of this press release above entitled "Financial Guidance."

Conference Call Information

Management will host a conference call and webcast today at 8:00 am ET to discuss these results and provide an update on the company. A live webcast of the conference call may be accessed on the "Investors" section of the company's website, www.momentapharma.com. Please go to the site at least 15 minutes prior to the call in order to register, download, and install any necessary software. An archived version of the webcast will be posted on the Momenta website approximately two hours after the call.

To access the call you may also dial (877) 224-9084 (domestic) or (720) 545-0022 (international) prior to the scheduled conference call time and provide the access code 62528080. A replay of the call will be available approximately two hours after the conclusion of the call and will be accessible through February 28, 2017.  To access the replay, please dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and provide the access code 62528080.

About Momenta

Momenta Pharmaceuticals is a biotechnology company specializing in the detailed structural analysis of complex drugs and is headquartered in Cambridge, MA. Momenta is applying its technology to the development of generic versions of complex drugs, biosimilar and potentially interchangeable biologics, and to the discovery and development of novel therapeutics for autoimmune indications.

To receive additional information about Momenta, please visit the website at www.momentapharma.com, which does not form a part of this press release.

Our logo, trademarks, and service marks are the property of Momenta Pharmaceuticals, Inc. All other trade names, trademarks, or service marks are property of their respective owners.

Forward Looking Statements

Statements in this press release regarding management's future expectations, beliefs, intentions, goals, strategies, plans or prospects, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements about the timing of the regulatory approval and launch of our product candidates, including Glatopa 40 mg; the Company's ability to meet its development and strategic goals; the dependence of an approval of the Glatopa 40 mg ANDA on resolution of the compliance observations in the FDA warning letter issued to Pfizer; expectations regarding long-term growth and sustainability; future operating expenses; program development and collaboration plans; timing of regulatory submissions; timing of clinical trials and the availability and announcement of clinical data; timing of patent litigation and other patent-related proceedings and decisions related to such litigation and proceedings; assessment of patents that are the subject of patent litigation; ability to generate value from our product candidates; and expectations regarding quarterly recognition of consideration and revenues under the Company's collaborations and how the Company plans to use its current cash balances.  Forward-looking statements may be identified by words such as "believe," "continue," "could," "expect," "guidance," "may," "plan," "potential," "target," "will" and other similar words or expressions, or the negative of these words or similar words or expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, including those referred to under the section "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the Securities and Exchange Commission, as well as other documents that may be filed by the Company from time to time with the Securities and Exchange Commission. As a result of such risks, uncertainties and factors, the Company's actual results may differ materially from any future results, performance or achievements discussed in or implied by the forward-looking statements contained herein. The Company is providing the information in this press release as of this date and assumes no obligations to update the information included in this press release or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


MOMENTA PHARMACEUTICALS, INC.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
 
  December 31, 2016 December 31, 2015
Assets    
Cash, cash equivalents and marketable securities $353,151 $350,044
Collaboration receivable 70,242 21,185
Restricted cash 21,761 20,660
Other assets 32,583 29,151
Total assets $477,737 $421,040
Liabilities and Stockholders' Equity    
Current liabilities $70,676 $38,782
Deferred revenue, net of current portion 31,360 12,213
Other long-term liabilities 3,793 69
Stockholders' equity 371,908 369,976
Total liabilities and stockholders' equity $ 477,737 $421,040
       


MOMENTA PHARMACEUTICALS, INC. 
Unaudited Condensed Statements of Operations and Comprehensive Income (Loss) 
(in thousands, except per share amounts) 
  
  Three Months Year  
  Ended December 31, Ended December 31,  
  2016 2015 2016  2015 
Collaboration revenues:          
Product revenue $15,817 $17,810 $74,648 $48,503 
Research and development revenue 18,378 4,583 34,971 41,147 
Total collaboration revenue 34,195 22,393 109,619 89,650 
          
Operating expenses:         
Research and development* 26,382 37,568 119,880 126,033 
General and administrative*  18,165 14,373 64,466 48,051 
Total operating expenses 44,547 51,941 184,346 174,084 
          
Operating loss (10,352)(29,548) (74,727)(84,434)
          
Other income 51,891 384 53,724 1,121 
           
Net income (loss) $41,539  $(29,164)$(21,003)$(83,313)
          
Basic net income (loss) per share $0.60 $(0.43 )$(0.31)$(1.32)
Diluted net income (loss) per share $0.60 $(0.43)$(0.31)$(1.32)
          
Weighted average shares used in computing basic net income (loss) per share 69,003 68,138 68,656 63,130 
Weighted average shares used in computing diluted net income (loss) per share 69,362 68,138 68,656 63,130 
          
Comprehensive income (loss) $41,375 $(29,176)$(20,921)$(83,293)
 
* Non-cash share-based compensation expense included in operating expenses is as follows: 
 
Research and development $1,132 $2,114 $7,558 $5,145  
General and administrative $2,434 $2,539 $10,764 $6,295  


INVESTOR CONTACT:

Sarah Carmody

Momenta Pharmaceuticals

1-617-395-5189

IR@momentapharma.com



MEDIA CONTACT:

Karen Sharma

MacDougall Biomedical Communications

1-781-235-3060

Momenta@macbiocom.com

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Source: Momenta Pharmaceuticals, Inc.

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