Wedbush Momenta

1. Equity
Research
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January 4, 2011
Momenta Pharmaceuticals (MNTA)
Price
Teva Fails to Secure Approval of Generic Enoxaparin $15.13
Before End of 2010; Expect M-Enox to Maintain Exclusivity
Rating
• M-Enox remains the sole approved generic five-months following launch; Outperform
ultimate exclusivity likely longer than the street expects. We believe that the
overhang in MTNA shares related to a near-term approval of a generic Enoxaparin
from Teva should begin to diminish. Recall that following the launch of M-Enox in Fair Value Estimate
late July, 2010, Teva was assuredly vocal that its generic version would be
approved in the near-term. Indeed, Teva’s CEO of North America stated in early $27
November that he would be deeply disappointed if the company did not receive
approval by the end of the year. With 2010 now in the past, we believe the street Duane Nash, MD JD MBA
may begin to recognize that M-Enox could remain the sole approved generic for (415) 263-6650
some time. That said, we do expect Teva to eventually secure approval, although duane.nash@wedbush.com
we believe M-Enox will maintain exclusivity until at least Q4:2011. Moreover, we
Akiva Felt
note that Teva may provide an update during an investor presentation on Jan 10, (415) 263-6648
2011. Should Teva announce a meaningful setback here, we would expect MNTA akiva.felt@wedbush.com
shares to move above $20.
• We estimate that MTNA will record between $60-70 million in M-Enox
revenues until a second generic is approved. Recall that MNTA currently Company Information
receives a 45% share of M-Enox profits from partner Sandoz, yet MNTA will be Shares Outst (M) 50.9
entitled to merely a 9-15% royalty should a second generic Enoxaparin be Market Cap (M) $770
approved. Our model currently suggests that MNTA will receive between $60-70 52-Wk Range $10.77 - $26.2
million per quarter in M-Enox revenues (Q4:10 estimate of $64.0 million) as long as
Book Value/sh $2.11
M-Enox remains the sole generic.
Cash/sh $3.04
• Potential near term partnerships could provide additional cash. We expect
Enterprise Value (M) $615
MTNA to sign one or more lucrative partnerships for M-118 and/or follow-on-
biologics in the near term, which would likely provide the company with additional LT Debt/Cap 0%
cash in the form of an up-front milestone payment. Other potential near-term
milestones include progress in the ongoing Copaxone lawsuit and potential updates
from Teva regarding its generic Enoxaparin. Company Description
• We reiterate our OUTERFORM rating fair value of $27. We continue to believe Momenta Pharmaceuticals is a leader in
MNTA remains significantly undervalued and that the current share price presents a developing complex mixtures and follow-
Cardiovascular, Devices and Regenerative
very attractive opportunity for investors to acquire shares in a company positioned on biologic drugs. The company
to benefit immensely from the encroachment of generic drugs and biologics. currently has two generic products, one
approved, both directed to multi-billion
dollar markets, and both already
FYE Dec 2009A 2010E 2011E
partnered with Sandoz.
REV (M) ACTUAL CURR. PREV. CONS. CURR. PREV. CONS.
Q1 Mar $4.0A $3.7A $65.9E
Q2 Jun $6.6A $2.8A $66.5E
Q3 Sep $4.0A $52.0A $66.9E
Q4 Dec $5.6A $64.0E $68.4E $12.3E
Year* $20.2A $122.4E $123.6E $211.6E $178.3E
Change 37% 505% 73%
2009A 2010E 2011E
EPS ACTUAL CURR. PREV. CONS. CURR. PREV. CONS.
Q1 Mar $(0.46)A $(0.37)A $0.75E
Q2 Jun $(0.43)A $(0.34)A $0.74E
Q3 Sep $(0.38)A $0.70A $0.51E
Q4 Dec $(0.34)A $0.88E $0.98E $(0.23)E
Year* $(1.60)A $0.94E $1.17E $1.77E $1.68E
P/E nmx 16.2x 8.6x
Change nm nm nm
Source: Thomson Reuters
Consensus estimates are from Thomson First Call.
* Numbers may not add up due to rounding.
Wedbush Securities does and seeks to do business with companies covered in its research reports. Thus, investors
should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors
should consider this report as only a single factor in making their investment decision. Please see page 4 of this
report for analyst certification and important disclosure information.

2. Figure 1: Near-Term Milestones
Expected Date Event
Jan 10, 2011 Potential Enoxaparin update from Teva at investor presentation
Jan 12, 2011 Claim construction hearing for Mylan in ongoing Copaxone lawsuit vs. Teva
Feb 14-18, 2011 Potential Enoxaparin update during Teva’s quarterly call
Q1:2011 Court ruling on Markman hearing in ongoing Copaxone lawsuit vs. Teva
H1:2011 Potential licensing deal for M118
H1:2011 Potential biosimilar partnership(s)
H1:2011 Anticipated jury trial for M-356 (Generic Copaxone)
Q4:2011 Potential approval of TEVA’s generic Lovenox
Source: Company data, Wedbush Securities Inc
VALUATION AND RISKS
Our fair value of $27 is calculated using a sum-of-parts analysis, applying a 30% annual discount to our peak annual sales estimate for
M-Enoxaparin in DVT and ACS, M356 in Relapse-Remitting MS, and M118 in ACS, incorporating a 1-10 multiple for each based on
stage of clinical risk.
We use a probability weighted valuation for M-Enoxaparin, placing a 75% chance that another generic version will be approved in the
future. Therefore, we believe significant upside to our fair value exists should M-Enox remain the sole generic on the market. In any
event, however, we predict that M356 (generic Copaxone) will ultimately become MNTA’s most valuable drug.
In light of the FDA’s validation of MNTA’s core technology, as well as the commercial promise of M-Enoxaparin, M356 (Generic
Copaxone), and the company’s potential in creating follow-on Biologics, we reiterate our OUTPERFORM rating as MNTA remains one
of our favorite longer-term picks. That said, because a break-out in price may not occur until a partnership is announced for a follow-on
biologic or M118, or a positive Markman ruling is issued in the Copaxone litigation, the timing of which are difficult to predict, we
recommend MNTA for more patient investors with at least a six-month time horizon.
Risks to the attainment of our fair value include risks that: Momenta’s products obtain disappointing clinical trial results and/or fail
to obtain approval; physician prescribers are not be impressed with the products; Sandoz or another partner fails to effectively
commercialize Momenta’s drug candidates; third-party patents or lawsuits prevent commercialization; superior clinical results and/or
approval are obtained by a competitor.
Duane Nash, MD JD MBA (415) 263-6650 Momenta Pharmaceuticals | 2

3. We use multiples to account for clinical and regulatory risk at
Today: 1/4/11 Stock MktCap ($000) Upside
various stages of development.
NOVEL DRUGS / BIOLOGICS GENERICS Wedbush Current Fair Value for MNTA $27.03 $1,375,276 79%
1: in preclinical testing 6: In Pivotal Trial 1: Pre-ANDA 6: favorable trial verdict Current Full Pipeline Value: $27.03 $1,375,276 79%
2: passed preclinical 7: Pivotal data Cash: $3.04 $154,904
3: IND filing 8: regulatory review 3: ANDA filed 8: patent issues resolved MNTA Total Value: $30.07 $1,530,180 99%
4: Phase 1 data 9: approved 4: ANDA accepted 9: approved Current MNTA Stock: $15.13 $769,845
5: Phase 2 data 10: launched 5: favorable claim 10: launched
construction MNTA Shares Outstanding (000): 50,882
Momenta Pharmaceuticals M-Enoxaparin Valuation
Pricing $ MNTA Net
Peak Gross WW Wedbush Wedbush
Eligible # Annual per Patient Peak Revs Est/Actual Annual
Product Indication
WW Treatments Est per Year
Penetration Peak Sales
Est WW Launch
Multiple
Discount Rate
MktCap Fair Stock Fair
Est Est ($000) Value ($000) Value
Est/Actual ($000)
M-Enoxaparin Sole Generic DVT/ACS 5,000,000 $400 45% $900,000 $279,000 8/1/2010 10 30% $1,846,786 $36.30
Multiple
M-Enoxaparin DVT/ACS 5,000,000 $250 30% $375,000 $56,250 8/1/2010 10 30% $372,336 $7.32
Generics
Probability Weighted M-Enox Value
Scenario Total Value P Adj. Value
Sole Generic $36.30 25% $9.07
Multiple Generic $7.32 75% $5.49
Total: $14.56
Momenta Pharmaceuticals Remaining Product Pipeline
Relapse-Remitting
Generic Candidate M356 600,000 $7,000 30% $1,260,000 $419,580 1/1/2012 4 30% $588,895 $11.57
MS
Acute Coronary
Novel Drug M118 3,500,000 $786 12% $330,000 $82,500 6/1/2015 5 30% $45,432 $0.89
Syndromes
Source: Company reports, Wedbush Securities estimates
Momenta Pharmaceuticals (NASDAQ: MNTA) Wedbush PacGrow LifeSciences
Historical and Projected Income Statement Duane Nash, MD JD MBA
(In thousands except per share data)
(Fiscal Year Ends on December 31)
2009A 2010 2011E 2012E
FY:09A Q1A Q2A Q3A Q4E FY:10E Q1 Q2 Q3 Q4 FY:11E FY:12E
Revenues:
Royalties on Product Sales $ - $ - $ - $ 44,188 $ 61,240 $ 105,428 $ 63,197 $ 63,770 $ 64,159 $ 9,582 $ 200,708 $ 86,804
M-Enoxaparin in DVT and ACS - - - 44,188 61,240 105,428 63,197 63,770 64,159 9,582 200,708 43,212
M356 in Relapse Remitting Multiple Sclerosis - - - - - - - - - - - 43,593
M118 in Acute Coronary Syndrome - - - - - - - - - - - -
Collaboration Revenue $ 20,249 $ 3,690 $ 2,795 $ 7,773 $ 2,726 $ 16,984 $ 2,696 $ 2,748 $ 2,736 $ 2,726 $ 10,905 $ 10,920
Reimbursed development fees 20,249 3,690 2,795 2,773 2,726 11,984 2,696 2,748 2,736 2,726 10,905 10,920
Milestones - 5,000 - 5,000 - -
Upfront License Fees - - - -
Total Revenues $ 20,249 $ 3,690 $ 2,795 $ 51,961 $ 63,966 $ 122,412 $ 65,893 $ 66,517 $ 66,895 $ 12,308 $ 211,614 $ 97,724
Operating Expenses
R&D 60,612 12,255 11,778 12,488 12,769 49,290 13,056 13,350 15,150 15,491 57,048 65,530
Sales, General and Administrative 23,800 7,475 5,959 7,325 7,581 28,340 7,847 8,121 8,406 8,700 33,073 37,953
Other - - - - - - - - - - - -
Total Operating Expenses 84,412 19,730 17,737 19,813 20,350 77,630 20,903 21,471 23,556 24,191 90,122 103,483
Operating Income (Loss) (64,163) (16,040) (14,942) 32,148 43,616 44,782 44,990 45,046 43,339 (11,883) 121,492 (5,758)
Interest income 450 - - 46 69 115 69 69 69 69 276 276
Interest expense (299) (44) (62) (74) (89) (269) (89) (89) (89) (89) (355) (355)
Income Before Income Taxes (64,012) (16,084) (15,004) 32,120 43,596 44,628 44,970 45,026 43,319 (11,903) 121,413 (5,837)
Other comprehensive income (loss)
Provision for Income Taxes (benefit) - - - - 2,231 2,231 6,746 6,754 16,895 - 30,394 859
Net Income (Loss) $ (64,012) $ (16,084) $ (15,004) $ 32,120 $ 41,364 $ 42,396 $ 38,225 $ 38,272 $ 26,425 $ (11,903) $ 91,019 $ (6,697)
GAAP EPS (Taxed, Fully Diluted) (1.60) (0.37) (0.34) 0.70 0.88 0.94 0.75 0.74 0.51 (0.23) 1.77 (0.13)
Weighted Shares Outstanding (Basic) 40,056 43,752 44,069 44,719 45,698 44,560 49,819 50,069 50,319 50,569 50,194 51,194
Total Shares Outstanding (Diluted) 40,056 43,752 44,069 46,032 47,182 45,259 51,132 51,382 51,632 51,882 51,507 52,507
Net Cash $89,737 $81,719 $68,733 $65,686 $154,904 $150,599 $191,356 $229,243 $255,839 $298,718 $294,413 $291,021
Source: Company reports, Wedbush Securities estimates
Duane Nash, MD JD MBA (415) 263-6650 Momenta Pharmaceuticals | 3

4. Analyst Certification
I, Duane Nash, MD JD MBA, Akiva Felt, certify that the views expressed in this report accurately reflect my personal opinion and that I have not
and will not, directly or indirectly, receive compensation or other payments in connection with my specific recommendations or views contained
in this report.
Disclosure information regarding historical ratings and price targets is available at http://www.wedbush.com/ResearchDisclosure/DisclosureQ310.pdf
Investment Rating System:
Outperform: Expect the total return of the stock to outperform relative to the median total return of the analyst’s (or the analyst’s team) coverage
universe over the next 6-12 months.
Neutral: Expect the total return of the stock to perform in-line with the median total return of the analyst’s (or the analyst’s team) coverage
universe over the next 6-12 months.
Underperform: Expect the total return of the stock to underperform relative to the median total return of the analyst’s (or the analyst’s team)
coverage universe over the next 6-12 months.
The Investment Ratings are based on the expected performance of a stock (based on anticipated total return to price target) relative to the
other stocks in the analyst’s coverage universe (or the analyst’s team coverage).*
Rating Distribution Investment Banking Relationships
(as of September 30, 2010) (as of September 30, 2010)
Outperform: 53% Outperform: 11%
Neutral: 38% Neutral: 2%
Underperform: 9% Underperform: 3%
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conform to Buy, Hold, and Sell, respectively. Please note, however, the definitions are not the same as WS’ stock ratings are on a relative
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Capital Markets Disclosures as of January 4, 2011
Company Disclosure
Momenta Pharmaceuticals 1
Research Disclosure Legend
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directly involved in the preparation of this report has a long position in the common stocks.
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Duane Nash, MD JD MBA (415) 263-6650 Momenta Pharmaceuticals | 4

5. * WS changed its rating system from (Strong Buy/Buy/Hold/Sell) to (Outperform/ Neutral/Underperform) on July 14, 2009.
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Duane Nash, MD JD MBA (415) 263-6650 Momenta Pharmaceuticals | 5

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