17% Total Revenue Growth, Driven by Strong Feraheme Performance
Favorable Terms Achieved in Recent
Ending Cash Balance of
Conference call scheduled for
“The strong revenue growth achieved in the first quarter of 2014 is the result of AMAG’s commercial team’s outstanding execution of our business plan. Even in the face of a changing competitive landscape, Feraheme continued to capture market share from other IV iron products. In the oral mucositis market, MuGard® also generated accelerated growth,” said
Business Highlights
-
The company reported
$20.8 million in total revenues in the first quarter of 2014, up 17% from the first quarter of 2013. Ex-factory U.S. Feraheme net product sales rose to$17.4 million , a 12% increase from$15.6 million in net sales in the first quarter of 2013. The growth in U.S. product sales was driven by increased use of Feraheme for the treatment of iron deficiency anemia (IDA) in chronic kidney disease (CKD) patients and an increase in net revenue per gram of Feraheme from the first quarter of 2013.
-
Total physician level Feraheme demand for the first quarter of 2014 was approximately 34,600 grams, representing a 17% increase from the first quarter of 2013.1 Physician level demand growth is higher than ex-factory sales growth due to reductions in wholesaler inventory levels during the first quarter of 2014. Feraheme’s overall market share increased to 15.5% of the non-dialysis intravenous (IV) iron market in the U.S, a 1.3% point increase from the first quarter of 2013.
-
Continued growth in MuGard demand and ex-factory sales in the quarter. AMAG is focused on executing initiatives to increase prescription volumes for MuGard and expand payer coverage.
-
AMAG is currently preparing for an end-of-review meeting with the
U.S. Food and Drug Administration (FDA ) following receipt of a complete response letter (CRL) inJanuary 2014 for AMAG’s supplemental new drug application (sNDA) for Feraheme. The sNDA sought to expand the label for Feraheme beyond the current CKD indication to include all adult IDA patients who have failed or cannot tolerate oral iron treatment.
-
In the
European Union (EU), our partnerTakeda Pharmaceutical Company Limited (Takeda) continued to progress the regulatory review for the broader IDA indication for Rienso™, the trade name for ferumoxytol inEurope . Takeda expects to receive aCommittee for Medicinal Products for Human Use (CHMP) opinion in second quarter of 2014.
-
AMAG completed an upsized
$200 million convertible debt offering on favorable terms, including a 2.5% coupon, five-year maturity and a conversion price of$27.02 per share. As part of the financing, the company entered into certain derivative agreements that increased the effective conversion price of the notes to$34.12 per share.
“During the first quarter of this year, we aggressively pursued several business development opportunities, resulting in an uptick in operating expenses compared to recent quarters. We continue to seek unique, high-potential in-license and acquisition candidates.” said
First Quarter 2014 Financial Results (unaudited)
Total revenues for the quarter ended
Feraheme cost of goods sold (COGS) for the first quarter of 2014 was
Operating expenses for the quarter ended
The company reported a net loss of
2014 Financial Outlook
The company’s financial guidance and outlook for 2014 is shown below and now includes an estimate of adjusted EBITDA2:
-
Total revenues of between
$88 million and $100 million including:-
U.S. Feraheme net product sales of
$75 million to $85 million ; -
Revenue from MuGard, ex-U.S. Feraheme product sales, royalties and milestones of
$13 million to $15 million ;
-
U.S. Feraheme net product sales of
- Cost of goods sold of 14% to 16% of Feraheme net product sales;
-
Total operating expenses of
$80 million to $85 million , including:-
Research and development expenses of
$20 million to $22 million ; -
Selling, general and administrative expenses of
$60 million to $63 million ;
-
Research and development expenses of
-
Net loss (GAAP)2 of
$10 million to $12 million (breakeven before impact of convertible debt offering); and -
Positive adjusted EBITDA2 (non-GAAP) of
$10 million to $13 million .
The above outlook does not include the potential milestone payment from Takeda for the broad IDA approval in the EU, which would favorably impact total revenue, net loss and adjusted EBITDA. Further, the company’s guidance for 2014 does not include the impact of business development transactions or potential expenses associated with potential further clinical development of Feraheme for the broad IDA indication in the U.S.
Conference Call and Webcast Access
The call will be webcast with slides and accessible through the Investors section of the company’s website at www.amagpharma.com. The webcast replay will be available from approximately
About AMAG
| AMAG Pharmaceuticals, Inc. | ||
| Condensed Consolidated Statements of Operations | ||
| (unaudited, amounts in thousands, except per share data) | ||
| Three Months Ended March 31, | ||
|
2014 |
2013 |
|
| Revenues: | ||
| U.S. Feraheme product sales, net | $ 17,375 | $ 15,578 |
| License fee and other collaboration revenues | 3,120 | 2,003 |
| Other product sales and royalties | 340 | 299 |
| Total revenues | 20,835 | 17,880 |
| Operating costs and expenses: | ||
| Cost of product sales | 2,837 | 2,942 |
| Research and development expenses | 6,498 | 5,404 |
| Selling, general and administrative expenses | 17,491 | 14,005 |
| Total operating costs and expenses | 26,826 | 22,351 |
| Operating loss | (5,991) | (4,471) |
| Interest expense | (1,476) | — |
| Interest and dividend income, net | 265 | 271 |
| Gains on sale of assets | 100 | 299 |
| Gains on investments, net | — | 6 |
| Net loss | $ (7,102) | $ (3,895) |
| Net loss per share: | ||
| Basic and diluted | $ (0.33) | $ (0.18) |
| Weighted average shares outstanding used to compute net loss per share: | ||
| Basic and diluted | 21,824 | 21,544 |
| AMAG Pharmaceuticals, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (unaudited, amounts in thousands) | ||
| March 31, 2014 | December 31, 2013 | |
| Cash and cash equivalents | $ 200,916 | $ 26,986 |
| Short-term investments | 184,557 | 186,803 |
| Accounts receivable, net | 10,115 | 6,842 |
| Inventories | 20,804 | 17,217 |
| Receivable from collaboration | 202 | 278 |
| Other current assets | 4,410 | 6,279 |
| Total current assets | 421,004 | 244,405 |
| Property and equipment, net | 1,837 | 1,846 |
| Intangible assets, net | 16,815 | 16,844 |
| Other assets | 6,807 | 2,364 |
| Total assets | $ 446,463 | $ 265,459 |
| Accounts payable | $ 5,125 | $ 2,629 |
| Accrued expenses | 21,851 | 22,266 |
| Deferred revenues | 9,118 | 8,226 |
| Total current liabilities | 36,094 | 33,121 |
| Convertible 2.5% senior notes, net | 162,561 | — |
| Deferred revenues | 40,567 | 44,534 |
| Acquisition-related contingent consideration, net | 14,040 | 13,609 |
| Other long-term liabilities | 2,105 | 1,787 |
| Total long-term liabilities | 219,273 | 59,930 |
| Total stockholders’ equity | 191,096 | 172,408 |
| Total liabilities and stockholders’ equity | $ 446,463 | $ 265,459 |
About Feraheme® (ferumoxytol)/Rienso
Feraheme (ferumoxytol) Injection for IV use received marketing approval from the
Ferumoxytol received marketing approval in
About Iron Deficiency Anemia
More than 4 million Americans have iron deficiency anemia, many of whom are patients with gastrointestinal disease including bleeding in the upper and/or lower bowel, inflammatory bowel disease and malabsorption disorders.3 Other causes of IDA include chronic kidney disease, abnormal uterine bleeding, inflammatory diseases and chemotherapy-induced anemia. Many IDA patients fail treatment with oral iron due to intolerability, lack of absorption or side effects.
About Oral Mucositis
Oral mucositis is a painful inflammation and ulceration of the lining of the mouth. It is a common side effect of many of the radiotherapy and chemotherapy regimens used to treat cancer and affects almost 400,000 patients in the U.S. Its presence creates a significant burden of illness of cancer patients and is associated with weight loss, increased narcotic use, unplanned visits to physicians or the emergency room and hospital admission. The incremental medical care cost of severe oral mucositis in patients with head and neck cancer is approximately
Forward-looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Any statements contained herein which do not describe historical facts, including but not limited to statements regarding: our expectations and goals for 2014, including plans to maximize Feraheme sales and increase market share, to increase utilization of MuGard and to expand our product portfolio; expectations regarding our interactions with the
Such risks and uncertainties include, among others: (1) uncertainties regarding the likelihood and timing of potential approval of Feraheme in the U.S. in the broader IDA indication in light of the CRL we received from the
We disclaim any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements.
| 1 IMS Health Data |
| 2 Net loss (GAAP) is projected to be between $10 million and $12 million. The positive adjusted EBITDA (non-GAAP) range of $10 million to $13 million is calculated by adding the following back to Net loss (GAAP): interest expense and amortization of debt discount and deferred financing costs ($10 million to $12 million), depreciation and amortization ($1 million to $2 million), stock compensation expense ($9 million to $11 million) and fair value adjustments to contingent consideration expense ($2 million to $3 million); and subtracting interest income ($1 million to $2 million). Adjusted EBITDA is a non-GAAP measure. AMAG believes that this non-GAAP financial measure, when considered together with information presented in accordance with GAAP, can enhance an overall understanding of AMAG’s financial performance. We include adjusted EBITDA to provide investors with a more complete understanding of operational results and trends. AMAG’s management uses adjusted EBITDA, in conjunction with other indicators, for planning and forecasting purposes and for measuring the company’s performance. EBITDA and adjusted EBITDA should be considered in addition to, and not as substitutes for, or superior to, financial measures calculated in accordance with GAAP. The company may calculate adjusted EBITDA differently from other companies. |
| 3 Source: Cancer – US Census, Age-adjusted SEER incidence, primary market research, “Managing patients with Chemotherapy induced anemia”: (2008), “Saving costs in cancer anemia management. Recognizing functional iron deficiency (FID) and rationalizing EPO therapy.” (2002). GI – US Census, USRDS, DataMonitor Pipeline Insight: Inflammatory Bowel Disease, studies by Kappelman, and Tack, http://www.uchospitals.edu/pdf/uch_007937.pdf, http://www.ncbi.nlm.nih.gov/pubmed/15932566, http://www.haematologica.org/cgi/reprint/haematol.2009.009985v1.pdf. AUB and PP – AMAG primary market research, http://www.mdguidelines.com/dysfunctional-uterine-bleeding, National Vital Statistics Reports (NVSR), http://emedicine.medscape.com/article/257007-overview, “Have we forgotten the significance of postpartum iron deficiency?” (2005). |
CONTACT:AMAG Pharmaceuticals, Inc. Contact:Scott Holmes , 617-498-3376
