BioWorld Today Contributing Writer

Stock in Momenta Pharmaceuticals Inc. dropped sharply Tuesday following news that Teva Pharmaceuticals Industries Ltd. received a minor deficiencies letter on its application for a generic Lovenox injection. Investors have taken the correspondence as a sign that Teva's product is close to the finish line. Momenta's M-Enoxaparin is currently the only generic formulation of Lovenox on the market, and Teva's offering could seriously cut into Momenta's revenues.

Shares of Momenta (NASDAQ:MNTA) were down 20.9 percent, or $3.30, to close at $12.50 on Tuesday.

"We do not view this as a setback for Momenta," Beverly Holley, director of investor relations for Momenta, told BioWorld Today. Holley said that Teva had previously indicated that they hoped to receive approval by the end of 2010, and missed that target.

"More recently they indicated that they anticipated hearing from FDA by the end of this month, and that they hoped it would be an approval. With no approval yet, they now face a minor deficiency which must be addressed, leaving Momenta/Sandoz as the sole provider of generic Lovenox," Holley said.

Momenta is partnered with Sandoz, the generic unit of Novartis AG, based in Basel, Switzerland, for the development of M-Enoxaparin, its generic version of Sanofi-Aventis SA's blood thinner Lovenox. The company received FDA approval in July 2010. Since then Momenta and Sandoz have been the sole provider of generic Lovenox.

Once another generic enters the market, Momenta will take a double hit. It will lose market share to the competing generic, and its payment plan under its partnership agreement with Sandoz will change. Momenta currently receives 45 percent of profits on M-Enoxaparin. Once that second generic hits the market, the agreement will default to a standard royalty share on net sales. (See BioWorld Today, Dec. 9, 2010.)

Momenta's technology focuses on complex carbohydrates. M-Enoxaparin was its first marketed product and represented a "scientific and regulatory milestone," according to Holley, because it successfully reproduced a complex mixture drug.

The approval of M-Enoxaparin kicked the company over into profitability. Momenta reported its first profits in the third quarter of 2010, a net of $44 million compared with a net loss of $14.6 million for the same period in the previous year. (See BioWorld Today, July 26, 2010.)

Lovenox is a low molecular weight heparin (LMWH) comprised of thousands of complex sugar chains. It is labeled for the prevention and treatment of deep vein thrombosis and treatment of acute coronary syndrome.

The drug brought $2.9 billion in U.S. sales in 2009 for its manufacturer, Sanofi-Aventis. Early in 2010, Sanofi filed an injunction to block the FDA's approval of the M-Enoxaparin. That request was denied by the U.S. District Court of the District of Columbia. (See BioWorld Today, Aug. 27, 2010.)

That wasn't the only legal action the LMWH space has seen. In December 2010, Momenta filed a patent infringement suit against Teva, complaining that Teva's manufacturing process for its generic Lovenox infringes a patent owned by Momenta. Teva responded, calling the lawsuit "meritless" and the allegations "baseless."

Amphastar Pharmaceuticals Inc. has also submitted an abbreviated new drug application for a generic Lovenox. The approval saga for all of those products has stretched on for years as the FDA wrestled with issues of precedence and equivalence.

The FDA said the process of approving Momenta's product took so long because it had to determine whether it had the authority to review a complex generic drug like Lovenox; it had to demonstrate the generic's "sameness" to the branded product; and it had to address potential heparin contamination issues, after tainted products from China caused several deaths. (See BioWorld Today, March 18, 2008.)

The FDA used stringent criteria to determine the "sameness" of the product. It required equivalence of physiochemical properties, heparin source material, derivation techniques, disaccharide building blocks, fragment mapping, oligosaccharide species sequence, biological and biochemical assays and in vivo pharmacodynamic profiling. (See BioWorld Today, July 26, 2010.)

In 2007, the FDA rejected Momenta and Sandoz's filing, citing a failure to adequately address the drug's potential for immunogenicity, but the companies gathered more data and resubmitted. (See BioWorld Today, Nov. 7, 2007.)

Considering all of the snarls involved in the approval of M-Enoxaparin, it is not unreasonable to take Teva's 30-60 day timeline with a grain of salt.

Oppenheimer analyst Brett Holley called Teva's timeline "somewhat unclear," writing, "Given the rejection of SNY's CP, we believe there is some chance TEVA's answers may not satisfy the FDA."

Moness Crespi Hardt analyst Avik Roy noted, "Teva is indicating confidence that they will gain approval in the next 30-60 days, but it is important to note that minor deficiency letters can involve meaningful problems." Roy estimated the market for generic Lovenox to be worth about $1 billion in 2011.

"M-Enoxaparin is very important to Momenta's near-term cash flow, though very few people expect it to last much longer. Ultimately, the story will hinge on the success of the company in developing generic Copaxone and other biosimilar products," Roy told BioWorld Today.

Approval of a competing generic Lovenox will hit Momenta's bottom line pretty hard. However, the company has a strong development pipeline driving future value. Its second product, a generic version of Copaxone, is on the runway, and the company has two other drugs in its pipeline: M118 (an anticoagulant) and M402 (a non-anticoagulant LMWH).