UPDATE 1-Momenta drops drug from deal with Novartis' unit

* Says ends deal on biosililar product M178

* Says may get part of related milestone payment

* Says to continue collaboration on 2 other drugs

Dec 18 (Reuters) - Momenta Pharmaceuticals Inc (MNTA.O) said it agreed with a unit of Switzerland's Novartis (NOVN.VX) to end a collaboration and license agreement on a biosimilar product.

On Dec. 15, Momenta and Sandoz AG agreed to terminate the deal on biosimilar product M178, Momenta said in a regulatory filing.

This is the second product to be dropped from a deal that originally included four drugs.

The company may still receive a part of the related milestone payments if Sandoz uses certain intellectual property rights and data in a product that receives regulatory approval, Momenta said.

Both companies continued their collaboration on blood thinner M-Enoxaparin and a copy-cat version of multiple sclerosis treatment Copaxone, it said.

Last year, the companies had dropped a biosimilar product, M249, from the deal. Shares of the Cambridge, Massachusetts-based company closed flat at $10.52 Friday on Nasdaq. (Reporting by Vidya L Nathan in Bangalore; Editing by Unnikrishnan Nair)