Stifel: Momenta Pharma's Autoimmune Pipeline Potential Makes It A Buy

The Street has long been ambivalent on Momenta Pharmaceuticals, Inc. MNTA's prospects. But the generic drug developer scored one new advocate Thursday on the basis of its pipeline potential.

The Rating

Stifel Nicolaus analyst Alex Schwartz upgraded Momenta from Hold to Buy and raised the price target from $18 to $21.

The Thesis

Diminished forecasts for mid-to-later-term Glatopa sales, which are seen to be stunted by a competitive market, will be more than offset by other property successes, Schwartz said in a Thursday note. 

M281, in particular is considered to have a 15-percent probability of success, and Phase 1 data released in January demonstrates a “compelling” safety profile and 80-percent reduction in immunoglobulin G levels, the analyst said. 

Management is identifying lead indications, but the anti-FcRn antibody could eventually tap into markets for more than 80 autoimmune diseases associated with elevated IgG levels, including lupus and arthritis, Schwartz said. Phase 2 studies are scheduled to begin in the second half of the year.

Momenta’s M230 and M254 are also set to begin clinical trials in 2018.

“We further believe the company’s progress in its novel pipeline outweighs Copaxone’s market dynamics,” Schwartz said. “In the coming months, we expect investor interest to turn to M281 and the company’s novel pipeline that targets Fc-biology.”

Price Action

At the time of publication, shares were trading up 6.12 percent at $17.35.

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