On February 22, 2019 Momenta Pharmaceuticals, Inc. (Nasdaq: MNTA), a biotechnology company focused on discovering and developing novel biologic therapeutics to treat rare immune-mediated diseases, reported its financial results for the fourth quarter and full year ended December 31, 2018 (Press release, Momenta Pharmaceuticals, FEB 22, 2019, View Source [SID1234533600]).
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"In 2018 we transformed our company to focus on discovering and developing new therapies to treat rare immune-mediated disorders. We have since made important progress, as we have commenced two Phase 2 clinical trials of our anti-FcRn antibody, M281, and dosed the first healthy volunteer in part 1 of a Phase 1 / 2 clinical trial of our hypersialylated IgG candidate M254. Meanwhile, our legacy business continues to provide value in the form of revenue from the Glatopa franchise and we continue to work with Mylan to advance the Phase 3 clinical trial of M710, our biosimilar EYLEA candidate," said Craig A. Wheeler, President and Chief Executive Officer of Momenta Pharmaceuticals.
"Looking forward, as we focus on operational execution in the year ahead, we remain confident in the ability of our differentiated platforms to produce best-in-class immune-mediated therapeutics and are well-capitalized to execute on our development plans," Wheeler continued.
Fourth Quarter 2018 Highlights, Recent Events and Anticipated Upcoming Milestones
Novel Therapeutics Pipeline:
M281 (anti-FcRn): a fully human anti-neonatal Fc receptor (FcRn) aglycosylated immunoglobulin G (IgG1) monoclonal antibody (mAb)
The Company has commenced two Phase 2 clinical studies of M281 in gMG and HDFN with topline results anticipated in 2020 and 2021, respectively. The Company also plans to initiate a third study of M281 in an additional autoimmune indication in 2019.
In February 2019, the Company presented research at the Society for Maternal-Fetal Medicine 39th Annual Pregnancy Meeting in Las Vegas, NV highlighting the ability of M281 to inhibit transfer of immunoglobulin G from maternal to fetal circulation in an ex vivo placental perfusion model.
· In November 2018, the Company announced the publication of results from a Phase 1 clinical trial of M281 in healthy volunteers in the peer-reviewed journal Clinical Pharmacology & Therapeutics.
M254 (hsIgG): a hypersialylated immunoglobulin designed as a high potency alternative for intravenous immunoglobulin (IVIg)
· In January 2019, the Company announced that the first subject was dosed in the Phase 1/2 clinical trial in ITP. The multi-part study will first enroll healthy volunteers and includes single and multiple dose studies, and a randomized cross-over study comparing M254 to IVIg. Preliminary clinical data is expected in 2020.
M230 (CSL730): a recombinant Fc multimer being developed in collaboration with CSL
·The Phase 1 clinical trial in healthy volunteers to evaluate the safety and tolerability of M230 continues. Momenta’s partner, CSL expects to complete the Phase 1 study by the end of 2019.
Legacy Products:
Glatopa 20 mg and 40 mg: FDA approved generic versions of COPAXONE 20 mg and 40 mg, developed and commercialized in collaboration with Sandoz
·In the fourth quarter of 2018, Momenta recorded $10.8 million in product revenue from Sandoz’s sales of Glatopa products.
M923: a fully-owned proposed biosimilar to HUMIRA (adalimumab)
· In November 2018, the Company announced license agreements with AbbVie, providing worldwide rights for the launch of M923. Under the terms of the agreements, and subject to approval by health regulatory authorities, Momenta may launch M923 worldwide based on agreed-to launch dates, including in the United States (U.S.) in November 2023.
M710: a proposed biosimilar to EYLEA (aflibercept) candidate being developed in collaboration with Mylan
· In August 2018, Mylan initiated a pivotal clinical trial in patients with diabetic macular edema to compare safety, efficacy and immunogenicity of M710 with EYLEA. In November 2018, Momenta provided formal notice of termination for all other biosimilar candidates previously subject to the collaboration agreement with Mylan.
Corporate:
·In December 2018, Momenta announced the closing of a public offering of 20.0 million shares of its common stock at the price of $11.50 per share. Aggregate gross proceeds from the offering were $230.0 million.
Fourth Quarter and Full Year 2018 Financial Results
Revenue: In the fourth quarter of 2018, the Company recorded $10.8 million in product revenue from Sandoz’s sales of Glatopa, compared to $13.1 million for the same period in 2017. For the year ended December 31, 2018, the Company recorded $39.7 million in product revenue from Sandoz’s sales of Glatopa, compared to $66.8 million for the same period in 2017. The decrease in product revenue of $2.3 million, or 17.6% from the fourth quarter of 2017 to the fourth quarter of 2018 was primarily due to continued competition. The decrease in product revenue of $27.2 million, or 41.3% from the year ended 2017 to the year ended 2018 was primarily due to continued competition and reflects a $9.8 million deduction of our 50% share of GLATOPA 40 mg/mL inventory written off by Sandoz.
Research and development revenue for the fourth quarter of 2018 was $32.1 million, compared to $51.2 million in the same quarter in 2017. The decrease in research and development revenue of $19.2 million, or 37.3%, was primarily due to the recognition of an upfront payment of $50.0 million from CSL, offset in part by an increase of revenue recognized related to Mylan’s upfront payment of $28.4 million due to the partial termination of the Mylan collaboration agreement and the resulting determination that certain performance obligations under the agreement have been partially satisfied. For the year ended December 31, 2018, research and development revenue was $35.9 million compared to $72.1 million recorded in the same period in 2017. The decrease in research and development revenue of $36.2 million, or 50.2%, was primarily due to recognition of the $50.0 million upfront payment from CSL and the $10.0 million commercial milestone from Sandoz recognized in 2017 that was non-recurring in 2018. This was offset in part by an increase of revenue recognized related to Mylan’s upfront payment of $28.4 million due to the partial termination of the Mylan collaboration agreement and the resulting determination that certain performance obligations under the agreement have been partially satisfied.
Total revenue for the fourth quarter of 2018 was $42.8 million compared to $64.6 million for the same period in 2017. For the year ended December 31, 2018, total revenue was $75.6 million compared to $138.9 million for the same period in 2017.
Operating Expenses: Total GAAP operating expenses were $52.5 million in the fourth quarter of 2018. For the year ended December 31, 2018, total GAAP operating expenses were $256.9 million.
Research and development expenses for the fourth quarter of 2018 were $28.7 million, compared to $36.1 million for the same period in 2017. The decrease of $7.4 million, or 20.5%, was primarily due to decreased spending on the Company’s biosimilar programs. For the year ended December 31, 2018, research and development expenses were $124.0 million, compared to $149.2 million for the same period in 2017. The decrease of $25.2 million, or 16.9%, was due to decreased spending on the Company’s biosimilar programs of $43.5 million. These decreases were partially offset by increases in spend of $23.9 million on the Company’s novel therapeutic programs.
General and administrative expenses for the fourth quarter of 2018 were $21.5 million, compared with $15.8 million for the same period in 2017. The increase of $5.7 million, or 36.1%, was primarily driven by increased legal costs and depreciation. For the year ended December 31, 2018, general and administrative expenses were $85.1 million, compared to $82.2 million for the same period in 2017. The increase of $2.9 million, or 3.5%, was driven by net of increased rent expense of $3.3 million related to occupancy of new premises, one-time costs related to our strategic review of $3.2 million and depreciation of $3.6 million as the Company evaluated estimates of the useful lives of depreciable assets, partially offset by decreases of $4.6 million of legal costs relating to our ongoing litigation and personnel salaries of $2.3 million due in part to the recent workforce reduction.
Fourth quarter non-GAAP operating expense was $47.2 million, within the range of previously provided guidance of $45 – $55 million. Full year 2018 non-GAAP operating expense was $219.2 million. Non-GAAP operating expense is total operating expenses, less stock-based compensation expense, restructuring expense and collaborative reimbursement revenue. See "Non-GAAP Financial Information and Other Disclosures" and the table below entitled "Reconciliation of GAAP Results to Non-GAAP Financial Measures" for a reconciliation of GAAP operating expense to non-GAAP operating expense.
Net Income (Loss): The Company reported a net loss of $8.2 million, or $0.10 per share for the fourth quarter of 2018 compared to a net income of $13.8 million, or $0.18 per share for the same period in 2017. For the year ended December 31, 2018, the Company reported a net loss of $176.1 million, or $2.26 per share compared to a net loss of $88.1 million, or $1.20 per share for 2017.
Cash Position: At December 31, 2018, Momenta had $449.4 million in cash, cash equivalents and marketable securities compared to $281.6 million at September 30, 2018, reflecting the December 2018 common stock financing.
2019 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 financial measures. 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, less stock-based compensation expense, restructuring expense and collaborative reimbursement revenue. Momenta is providing quarterly non-GAAP operating expense guidance of $45 – $55 million for 2019.
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 as it excludes non-cash stock compensation expense, restructuring expense and collaborative reimbursement revenue. This non-GAAP financial measure should not be considered a substitute or an alternative to GAAP total operating expense and should not be considered a measure of Momenta’s liquidity. Instead, non-GAAP operating expense should only be used to supplement an understanding of Momenta’s operating results as reported under GAAP. Momenta has not provided GAAP reconciliation for its forward-looking non-GAAP annual or quarterly 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 estimated reconciling information that is available without unreasonable effort in the section of this press release above entitled "2019 Financial Guidance."
Conference Call Information
Management will host a conference call and webcast today at 8:30 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 7484068. A replay of the call will be available approximately two hours after the conclusion of the call and will be accessible through 7484068. To access the replay, please dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and provide the access code 7484068.