Achieves quarterly net product sales of
Executes on two business development initiatives to further expand maternal health business
Increases Non-GAAP Adjusted EBITDA and cash earnings guidance for 2015
Conference call scheduled for
“We continue to deliver strong financial performance by driving product sales growth, including Makena, which grew more than 58% in the quarter compared to the same quarter last year, and by identifying and executing on new business development opportunities,” said
2Q15 Business Highlights and Recent Developments
-
Net product sales increased to
$84.7 million in the second quarter of 2015, compared to$22.5 million in the corresponding period in 2014. This increase was driven by record sales of Makena in the quarter endedJune 30, 2015 . -
The company delivered record earnings in the second quarter of 2015, including operating income on a GAAP basis of
$61.1 million , compared with$1.2 million for the same period in 2014. On a non-GAAP basis, adjusted EBITDA grew to$52.1 million , compared with$1.6 million in the second quarter of 20142. - Makena achieved significant market share growth, increasing four percentage points over the first quarter of 2015 (to an estimated 32% share of patients) and continued to take share from compounded product.
-
Feraheme® (ferumoxytol) injection sales declined eight percent in the second quarter of 2015, as compared to the corresponding period in 2014 to
$20.6 million as the company implemented label changes to the package insert inMarch 2015 . -
The company continued to advance its lifecycle management program for Makena, including the submission of a prior approval supplement with the
FDA for the manufacture of a single-dose, preservative-free formulation of Makena byHospira, Inc. , the current manufacturer of the company’s multi-dose vial. -
The company announced that it entered into a definitive agreement to acquire CBR, the world’s largest stem cell collection and storage company serving pregnant women and their families, for
$700 million in cash. The transaction will further diversify AMAG’s revenue base, expand the size of its obstetrician-focused sales team, and add new consumer-directed sales and marketing capabilities. The transaction is forecasted to be immediately accretive to adjusted EBITDA and earnings and is expected to close in the third quarter of 2015. -
The company entered into an option agreement with
Velo Bio, LLC (Velo), which includes an upfront payment of$10 million to acquire the global rights to an orphan drug candidate being developed for use in the treatment of severe preeclampsia in pregnant women. The option to acquire the program can be exercised at the conclusion of an upcoming Phase 2b/3a clinical study. This transaction further expands AMAG’s maternal health portfolio and advances the company’s strategy of adding differentiated products in growing specialty markets.
Second Quarter Ended
Total revenues for the second quarter of 2015 were
Net product sales for the second quarter of 2015 totaled
Total operating expenses, excluding cost of product sales, for the second quarter of 2015 were
The company reported net income of
Non-GAAP adjusted EBITDA for the second quarter of 2015 was
As of
“The second quarter momentum built off an already strong start to 2015,” said
Six Months Ended
Net product sales for the six months ended
On a GAAP basis, net income for the first six months of 2015 totaled
Non-GAAP adjusted EBITDA for the six months ended
Updating 2015 Financial Outlook
The company is updating its 2015 guidance to reflect the business performance for the first half of 2015 and the outlook for the business for the remainder of 2015, including expectations of continued strong management of operating expenses. The guidance below does not include any expected revenue or expenses related to the acquisition of CBR, which is expected to close in the third quarter of 2015 and be immediately accretive to adjusted EBITDA and cash earnings, or the impact of the option agreement with Velo. The company will provide further guidance for the combined business later this year.
| $ in millions | Previous 2015 Guidance | Updated 2015 Guidance |
| Makena net sales | $260 – $285 | $260 – $285 |
| Feraheme and MuGard net sales | $90 – $100 | $85 – $95 |
| Total product sales | $350 – $385 | $345 – $380 |
| Total revenue | $395 – $430 | $395 – $430 |
| Adjusted EBITDA4 | $200 – $220 | $210 – $225 |
| Cash earnings4 | $170 – $190 | $180 – $195 |
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
Use of Non-GAAP Financial Measures
AMAG has presented certain non-GAAP financial measures, including non-GAAP adjusted EBITDA (earnings before income taxes, depreciation and amortization), non-GAAP net income or cash earnings and non-GAAP diluted earnings per share. These non-GAAP financial measures exclude certain amounts, expenses or income, from the corresponding financial measures determined in accordance with accounting principles generally accepted in the U.S. (GAAP). Management believes this non-GAAP information is useful for investors, taken in conjunction with AMAG’s GAAP financial statements, because it provides greater transparency regarding AMAG’s operating performance. Management uses these measures, among other factors, to assess and analyze operational results and trends and to make financial and operational decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of AMAG’s operating results as reported under GAAP, not as a substitute for GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. Reconciliations between these non-GAAP financial measures and the most comparable GAAP financial measures are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.
About AMAG
As a high-growth specialty pharmaceutical company,
About Makena® (hydroxyprogesterone caproate injection)
Makena® is a progestin indicated to reduce the risk of preterm birth in women with a singleton pregnancy who have a history of singleton spontaneous preterm birth.
The effectiveness of Makena is based on improvement in the proportion of women who delivered <37 weeks of gestation. There are no controlled trials demonstrating a direct clinical benefit, such as improvement in neonatal mortality and morbidity.
Limitation of use: While there are many risk factors for preterm birth, safety and efficacy of Makena has been demonstrated only in women with a prior spontaneous singleton preterm birth. It is not intended for use in women with multiple gestations or other risk factors for preterm birth.
Makena should not be used in women with any of the following conditions: blood clots or other blood clotting problems, breast cancer or other hormone-sensitive cancers, or history of these conditions; unusual vaginal bleeding not related to the current pregnancy, yellowing of the skin due to liver problems during pregnancy, liver problems, including liver tumors, or uncontrolled high blood pressure.
Before patients receive Makena, they should tell their healthcare provider if they have an allergy to hydroxyprogesterone caproate, castor oil, or any of the other ingredients in Makena; diabetes or prediabetes, epilepsy, migraine headaches, asthma, heart problems, kidney problems, depression, or high blood pressure.
In one clinical study, certain complications or events associated with pregnancy occurred more often in women who received Makena. These included miscarriage (pregnancy loss before 20 weeks of pregnancy), stillbirth (fetal death occurring during or after the 20th week of pregnancy), hospital admission for preterm labor, preeclampsia (high blood pressure and too much protein in the urine), gestational hypertension (high blood pressure caused by pregnancy), gestational diabetes, and oligohydramnios (low amniotic fluid levels).
Makena may cause serious side effects including blood clots, allergic reactions, depression, and yellowing of the skin and the whites of the eyes. The most common side effects of Makena include injection site reactions (pain, swelling, itching, bruising, or a hard bump), hives, itching, nausea, and diarrhea. For additional U.S. product information, including full prescribing information, please visit www.makena.com.
About Feraheme® (ferumoxytol) Injection
Feraheme received marketing approval from the
Ferumoxytol received marketing approval in
Fatal and serious hypersensitivity reactions including anaphylaxis have occurred in patients receiving Feraheme. Initial symptoms may include hypotension, syncope, unresponsiveness, cardiac/cardiorespiratory arrest. Feraheme is contraindicated in patients with a known hypersensitivity to Feraheme or any of its components, or a history of allergic reaction to any intravenous iron product.
For additional U.S. product information, please see full Prescribing Information, including Boxed Warning, available at www.feraheme.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA) and other federal securities laws. Any statements contained herein which do not describe historical facts, including, among others, statements regarding the expansion of AMAG’s maternal health business; AMAG’s beliefs that recently announced business development transactions will further AMAG’s commitment to helping pregnant women and their families and efforts to collaborate with the maternal health community; AMAG’s expectations that such transactions will provide additional avenues of future growth for AMAG, and will add new capabilities to AMAG’s organization that can be leveraged across its current and future product lines; AMAG’s expectations that the pending CBR acquisition, including timing for closing, that the transaction will further diversify AMAG’s revenue base, expand the size of its obstetrician-focused sales team, add new consumer-directed sales and marketing capabilities and be immediately accretive to adjusted EBITDA and earnings; AMAG’s expectations that the potential acquisition of a clinical-stage preeclampsia program further advances AMAG’s strategy of adding differentiated products in growing specialty markets; anticipated future growth in sales of Feraheme and related expectations regarding continued growth in the intravenous iron market and forecasted future price appreciation for Feraheme; AMAG’s ability to further diversify its portfolio and achieve greater financial flexibility as its pursues additional business development transactions; AMAG’s updated 2015 financial guidance, including net product sales, adjusted EBITDA and cash earnings and the characterization of AMAG as a high-growth specialty pharmaceutical and plans for growth, including organic growth and portfolio expansion activities, are forward-looking statements which involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements.
Such risks and uncertainties include, among others, those risks identified in AMAG’s filings with the
AMAG disclaims 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.
AMAG Pharmaceuticals® and Feraheme® are registered trademark of
_____________________________
1 See share count reconciliation at the conclusion of this press release.
2 See summaries of non-GAAP adjustments to reconcile GAAP Consolidated Statements of Operations to Non-GAAP Consolidated Statements of Operations for the three and six month periods ended
3 Based on unaudited pro forma sales for the second quarter of 2014. Acquisition of
4 See summary of forecasted Non-GAAP adjusted EBITDA and Non-GAAP cash earnings at conclusion of this press release.
— Tables Follow —
| AMAG Pharmaceuticals, Inc. | ||||
| Condensed Consolidated Statements of Operations | ||||
| (unaudited, amounts in thousands, except for per share data) | ||||
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||
| 2015 | 2014 | 2015 | 2014 | |
| Revenues: | ||||
| Makena | $63,574 | $– | $119,103 | $– |
| Feraheme/MuGard | 21,078 | 22,484 | 42,964 | 40,007 |
| License fee, collaboration and other | 39,232 | 2,318 | 51,322 | 5,630 |
| Total revenues | 123,884 | 24,802 | 213,389 | 45,637 |
| Operating costs and expenses: | ||||
| Cost of product sales | 19,679 | 2,743 | 40,705 | 5,580 |
| Research and development | 8,184 | 4,540 | 15,172 | 11,038 |
| Selling, general and administrative | 31,801 | 16,284 | 63,913 | 33,775 |
| Acquisition-related | 2,653 | — | 2,653 | — |
| Restructuring | 443 | — | 1,014 | — |
| Total costs and expenses | 62,760 | 23,567 | 123,457 | 50,393 |
| Operating income (loss) | 61,124 | 1,235 | 89,932 | (4,756) |
| Other income (expense): | ||||
| Interest expense | (10,205) | (3,051) | (20,572) | (4,527) |
| Other income, net | 374 | 269 | 445 | 634 |
| Total other income (expense) | (9,831) | (2,782) | (20,127) | (3,893) |
| Net income (loss) before income taxes | 51,293 | (1,547) | 69,805 | (8,649) |
| Income tax expense | (18,035) | — | (23,643) | — |
| Net income (loss) | $33,258 | ($1,547) | $46,162 | ($8,649) |
| Net income (loss) per share | ||||
| Basic | $1.09 | ($0.07) | $1.60 | ($0.40) |
| Diluted | $0.82 | ($0.07) | $1.23 | ($0.40) |
| Weighted average shares outstanding used to compute net income (loss) per share: | ||||
| Basic | 30,636 | 21,925 | 28,934 | 21,875 |
| Diluted | 43,181 | 21,925 | 40,791 | 21,875 |
| AMAG Pharmaceuticals, Inc. | ||
| Condensed Consolidated Balance Sheets | ||
| (unaudited, amounts in thousands) | ||
| June 30, 2015 | December 31, 2014 | |
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $89,884 | $119,296 |
| Investments | 308,524 | 24,890 |
| Accounts receivable, net | 57,954 | 38,172 |
| Inventories | 34,363 | 40,610 |
| Receivable from collaboration | 5,615 | 4,518 |
| Deferred tax assets | 53,135 | 32,094 |
| Prepaid and other current assets | 6,004 | 14,456 |
| Total current assets | 555,479 | 274,036 |
| Property and equipment, net | 1,917 | 1,519 |
| Goodwill | 204,414 | 205,824 |
| Intangible assets, net | 863,020 | 887,908 |
| Restricted cash | 2,397 | 2,397 |
| Other long-term assets | 12,056 | 17,249 |
| Total assets | $1,639,283 | $1,388,933 |
| Liabilities and stockholders’ equity | ||
| Current liabilities: | ||
| Accounts payable | $6,147 | $7,301 |
| Accrued expenses | 89,617 | 80,093 |
| Current portion of long-term debt | 132,680 | 34,000 |
| Current portion of contingent consideration | 95,526 | 718 |
| Deferred revenues | — | 44,376 |
| Total current liabilities | 323,970 | 166,488 |
| Long-term liabilities | ||
| Long-term debt, net | 179,706 | 293,905 |
| Convertible 2.5% senior notes, net | 170,817 | 167,441 |
| Acquisition-related contingent consideration | 124,666 | 217,984 |
| Deferred tax liabilities | 122,303 | 77,619 |
| Other long-term liabilities | 4,840 | 5,543 |
| Total liabilities | 926,302 | 928,980 |
| Total stockholders’ equity | 712,981 | 459,953 |
| Total liabilities and stockholders’ equity | $1,639,283 | $1,388,933 |
| AMAG Pharmaceuticals, Inc. | ||||||||
| Condensed Consolidated Statements of Operations to Non-GAAP Statements of Operations | ||||||||
| (unaudited, amounts in thousands, except per share data) | ||||||||
| Three Months Ended | Three Months Ended | |||||||
| June 30, 2015 | June 30, 2014 | |||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||
| Revenues: | ||||||||
| Makena | $63,574 | $– | $63,574 | $– | $– | $– | ||
| Feraheme/MuGard | 21,078 | — | 21,078 | 22,484 | — | 22,484 | ||
| License fee, collaboration and other | 39,232 | (33,563) | 5 | 5,669 | 2,318 | (1,974) | 5 | 344 |
| Total revenues | 123,884 | (33,563) | 90,321 | 24,802 | (1,974) | 22,828 | ||
| Operating costs and expenses: | ||||||||
| Cost of products sold | 19,679 | (16,521) | 6 | 3,158 | 2,743 | 429 | 6 | 3,172 |
| Research and development | 8,184 | (1,197) | 7 | 6,987 | 4,540 | (375) | 7 | 4,165 |
| Selling, general and administrative | 31,801 | (3,679) | 8 | 28,122 | 16,284 | (2,368) | 8 | 13,916 |
| Acquisition-related | 2,653 | (2,653) | 9 | — | — | — | — | |
| Restructuring | 443 | (443) | 10 | — | — | — | — | |
| Total costs and expenses | 62,760 | (24,493) | 38,267 | 23,567 | (2,314) | 21,253 | ||
| Operating income (loss) / Adjusted EBITDA | 61,124 | (9,070) | 52,054 | 1,235 | 340 | 1,575 | ||
| Other income (expense): | ||||||||
| Interest expense | (10,205) | 2,946 | 11 | (7,259) | (3,051) | 1,801 | 11 | (1,250) |
| Other income, net | 374 | (2) | 372 | 269 | (16) | 253 | ||
| Total other income (expense) | (9,831) | 2,944 | (6,887) | (2,782) | 1,785 | (997) | ||
| Net income (loss) before income taxes | 51,293 | (6,126) | 45,167 | (1,547) | 2,125 | 578 | ||
| Income tax expense (benefit) | 18,035 | (17,655) | 12 | 380 | — | — | — | |
| Net income (loss) / cash earnings | $33,258 | $11,529 | $44,787 | ($1,547) | $2,125 | $578 | ||
| Net income (loss) / cash earnings per share | ||||||||
| Basic | $1.09 | $1.46 | ($0.07) | $0.03 | ||||
| Diluted | $0.82 | $1.12 | ($0.07) | $0.03 | ||||
| Weighted average shares outstanding | ||||||||
| Basic | 30,636 | 30,636 | 21,925 | 21,925 | ||||
| Diluted | 43,181 | 40,002 | 21,925 | 22,169 | ||||
| ______________________________ | ||||||||
| 5 Eliminate non-cash revenue related to recognition of previously deferred revenue on Takeda agreement. | ||||||||
| 6 Eliminate the following: (i) non-cash step-up of inventory from purchase accounting (2015); (ii) amortization expense related to intangible assets; (iii) depreciation expense; and (iv) stock-based compensation expense. | ||||||||
| 7 Eliminate the following: (i) non-cash step-up of inventory from purchase accounting (2015); (ii) depreciation expense; and (iii) stock-based compensation expense. | ||||||||
| 8 Eliminate the following: (i) non-cash adjustments to contingent consideration; (ii) certain transaction-related expenses (2015); (iii) depreciation expense; and (iv) stock-based compensation expense. | ||||||||
| 9 Eliminate one-time costs related to Cord Blood Registry acquisition. | ||||||||
| 10 Eliminate one-time restructuring costs related to Lumara Health acquisition. | ||||||||
| 11 Eliminate non-cash interest expense; amortization of debt discount and other costs. | ||||||||
| 12 Eliminate non-cash income tax expense. | ||||||||
| AMAG Pharmaceuticals, Inc. | ||||||||
| Condensed Consolidated Statements of Operations to Non-GAAP Statements of Operations | ||||||||
| (unaudited, amounts in thousands, except per share data) | ||||||||
| Six Months Ended | Six Months Ended | |||||||
| June 30, 2015 | June 30, 2014 | |||||||
| GAAP | Adjustments | Non-GAAP | GAAP | Adjustments | Non-GAAP | |||
| Revenues: | ||||||||
| Makena | $119,103 | $– | $119,103 | $– | $– | $– | ||
| Feraheme/MuGard | 42,964 | — | 42,964 | 40,007 | — | 40,007 | ||
| License fee, collaboration and other | 51,322 | (39,965) | 13 | 11,357 | 5,630 | (3,948) | 13 | 1,682 |
| Total revenues | 213,389 | (39,965) | 173,424 | 45,637 | (3,948) | 41,689 | ||
| Operating costs and expenses: | ||||||||
| Cost of products sold | 40,705 | (34,261) | 14 | 6,444 | 5,580 | (1,093) | 14 | 4,487 |
| Research and development | 15,172 | (1,691) | 15 | 13,481 | 11,038 | (842) | 15 | 10,196 |
| Selling, general and administrative | 63,913 | (9,866) | 16 | 54,047 | 33,775 | (4,696) | 16 | 29,079 |
| Acquisition-related | 2,653 | (2,653) | 17 | — | — | — | — | |
| Restructuring | 1,014 | (1,014) | 18 | — | — | — | — | |
| Total costs and expenses | 123,457 | (49,485) | 73,972 | 50,393 | (6,631) | 43,762 | ||
| Operating income (loss) / Adjusted EBITDA | 89,932 | 9,520 | 99,452 | (4,756) | 2,683 | (2,073) | ||
| Other income (expense): | ||||||||
| Interest expense | (20,572) | 5,832 | 19 | (14,740) | (4,527) | 2,652 | 19 | (1,875) |
| Other income, net | 445 | (2) | 443 | 634 | (116) | 518 | ||
| Total other income (expense) | (20,127) | 5,830 | (14,297) | (3,893) | 2,536 | (1,357) | ||
| Net income (loss) before income taxes | 69,805 | 15,350 | 85,155 | (8,649) | 5,219 | (3,430) | ||
| Income tax expense (benefit) | 23,643 | (23,025) | 20 | 618 | — | — | — | |
| Net income (loss) / cash earnings | $46,162 | $38,375 | $84,537 | ($8,649) | $5,219 | ($3,430) | ||
| Net income (loss) / cash earnings per share | ||||||||
| Basic | $1.60 | $2.92 | ($0.40) | ($0.16) | ||||
| Diluted | $1.23 | $2.27 | ($0.40) | ($0.16) | ||||
| Weighted average shares outstanding | ||||||||
| Basic | 28,934 | 28,934 | 21,875 | 21,875 | ||||
| Diluted | 40,791 | 37,182 | 21,875 | 21,875 | ||||
| ____________________________ | ||||||||
| 13 Eliminate non-cash revenue related to recognition of previously deferred revenue on Takeda agreement. | ||||||||
| 14 Eliminate the following: (i) non-cash step-up of inventory from purchase accounting (2015); (ii) amortization expense related to intangible assets; (iii) depreciation expense; and (iv) stock-based compensation expense. | ||||||||
| 15 Eliminate the following: (i) non-cash step-up of inventory from purchase accounting (2015); (ii) depreciation expense; and (iii) stock-based compensation expense. | ||||||||
| 16 Eliminate the following: (i) non-cash adjustments to contingent consideration; (ii) certain transaction related expenses; (iii) depreciation expense; and (iv) stock-based compensation expense. | ||||||||
| 17 Eliminate one-time costs related to Cord Blood Registry acquisition. | ||||||||
| 18 Eliminate one-time restructuring costs related to Lumara Health acquisition. | ||||||||
| 19 Eliminate non-cash interest expense; amortization of debt discounts and other costs. | ||||||||
| 20 Eliminate non-cash income tax expense. | ||||||||
| AMAG Pharmaceuticals, Inc. | |
| Reconciliation of 2015 Updated Guidance of Non-GAAP Adjusted EBITDA and Non-GAAP Net Income / Cash Earnings | |
| (unaudited, amounts in millions) | |
|
2015 Updated Financial Guidance |
|
| GAAP net income | $ 75 – 90 |
| Depreciation & intangible asset amortization | 55 |
| Interest expense, net | 40 |
| Provision (benefit) for income taxes | 35 |
| EBITDA | $ 205 -220 |
| Non-cash collaboration revenue | (40) |
| Non-cash inventory step-up adjustments | 15 |
| Stock-based compensation | 15 |
| Adjustment to contingent consideration | 10 |
| Severance and transaction-related costs | 5 |
| Adjusted EBITDA | $ 210 – 225 |
| Cash interest expense | (30) |
| Non-GAAP net income – cash earnings | $ 180 – 195 |
|
AMAG Pharmaceuticals, Inc. Share Count Reconciliation (amounts in millions) |
||
|
Three Months Ended June 30, 2015 |
Six Months Ended June 30, 2015 |
|
| Weighted average basic shares outstanding | 30.6 | 28.9 |
| Employee equity incentive awards | 1.8 | 1.7 |
| Convertible notes | 7.4 | 7.4 |
| Warrants | 3.4 | 2.8 |
| GAAP diluted shares outstanding | 43.2 | 40.8 |
| Adjustment2 | (3.2) | (3.6) |
| Non-GAAP diluted shares outstanding | 40.0 | 37.2 |
CONTACT:AMAG Pharmaceuticals, Inc. Linda Lennox , 617-498-2846 Vice President, Investor Relations & Corporate Communications
