Momenta calls time on biosimilar R&D, cuts half its staff

Momenta’s foray into the biosimilars business has come to a sad end, with the company slashing staff and programs as it refocuses on its novel drug pipeline targeted at immune disorders.

Cambridge, Massachusetts-based Momenta is shedding 110 staff—around 50% of its workforce—and most of those will be gone within the next few days as it tries to slash $250 million off its costs in the next five years. The cull includes five of the company’s senior executives including Chief Operating Officer Ganesh Kaundinya, who also serves as Momenta’s chief scientific officer, and cuts the company's executive team in half.

The decision says a lot about the state of the U.S. biosimilars market, which hasn’t yet taken off in the way it has in Europe where more than 40 biosimilar products have been approved and—in some cases—dominate national markets. To date, about a dozen biosimilars have been approved by the FDA, and only a handful have been launched.

That slow growth has been put down to a sluggish regulatory process, access-delaying patent litigation and the fact that the agency hasn’t yet agreed that any biosimilar meets its criteria for being therapeutically interchangeable with the reference drug, which has hampered uptake by prescribers.

Momenta currently has seven biosimilars in its pipeline and is hoping to transfer the rights to five of them to development partner Mylan, with negotiations are ongoing right now, including a late-stage version of Bristol-Myers Squibb’s arthritis drug Orencia. It will, however, retain rights to a version of eye disease drug Eylea developed under the partnership, as well as an in-house biosimilar of AbbVie’s immunology drug Humira, which have advanced to late-stage development.

The company had hoped to transfer the rights to the whole portfolio, according to President and CEO Craig Wheeler, who said on a conference call that the initial aim was to cut its spending on biosimilars entirely and bring in new funding for the novel pipeline, headed by anti-FcRn antibody M281 for immunoglobulin G mediated diseases which has cleared a phase 1 trial.

The intention was to sell the division outright or find some other way to hive it off, but that plan was scuttled by problems including “overlapping” portfolios as well as an “increasingly challenging political climate associated with international investment in U.S. business.”

“As a result, we have made the decision to restructure the company on our own,” said Wheeler. He acknowledged that retaining two late-stage biosimilar programs will keep short-term spending higher, but with the potential payoff of revenue streams that can support the novel pipeline.

The wholly owned Humira biosimilar is scheduled for filing in the U.S. before the end of the year and in Europe in early 2019, but Momenta is hoping for revenues from Europe first—possibly in 2020—and is looking for a commercial partner for the program.

Wheeler says the Mylan-partnered Eylea drug, in phase 3, is in the lead versus other biosimilars and could launch in 2023, with “high potential” commercially.

Most of the staff losses will be in the biosimilars team, but Momenta is also cutting its research staff that work outside the scope of its main pipeline programs. Along with M281, that includes recombinant Fc multimer M230 and intravenous immunoglobulin M254—all three of which will start proof-of-concept trials in the next four months.

The company ended the second quarter with $321 million in cash and estimates the restructuring will cost $17 million to $20 million through 2018. Wheeler said additional fundraising will probably be needed in 2020 as the pipeline develops.