AMAG Pharmaceuticals Announces Financial Results for the Third Quarter and Nine Months Ended September 30, 2012
AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG), a specialty pharmaceutical company focused on the development and commercialization of Feraheme® (ferumoxytol) Injection for intravenous (IV) use to treat iron deficiency anemia (IDA), today reported unaudited consolidated financial results for the third quarter ended September 30, 2012. The company ended the third quarter of 2012 with approximately $211 million of cash, cash equivalents and investments.
- Total revenues for the third quarter of 2012 were $17.7 million, which included $16.2 of net U.S. Feraheme product revenues. As a result of actions taken earlier this year to improve the pricing dynamics for Feraheme, net revenue realized per gram of Feraheme increased in the third quarter of 2012 compared to the second quarter of 2012, reversing a historically downward trend.
- Feraheme provider demand1 for the third quarter of 2012 was approximately 27,500 grams, an 11% increase over the third quarter of 2011, with growth continuing to outpace IV iron market growth. Feraheme gained share in the hematology and hospital segments, with demand in these segments growing at 8% and 34%, respectively, compared to the third quarter of 2011.
- The company reported positive data from the second phase III clinical trials of Feraheme for the treatment of iron deficiency anemia regardless of the underlying cause and plans to submit a supplemental new drug application to the U.S. Food and Drug Administration in the fourth quarter of 2012.
- International expansion efforts for ferumoxytol are progressing as planned. The first shipment of ferumoxytol to support European launch of Rienso®, the brand name of ferumoxytol in Europe, occurred in the third quarter. Revenue from these sales has been deferred until the product has been sold to customers of Takeda Pharmaceuticals Company, Ltd., AMAG's partner in the EU and Canada. Additionally, Feraheme was launched in Canada early in the fourth quarter, for which AMAG has received a $3 million milestone payment, and today, Rienso was launched in Europe. The first commercial sale of Rienso in Europe, which is expected shortly, triggers a $15 million milestone payment from Takeda.
“We are pleased to report the results of our strong third quarter performance. Our updated full-year 2012 financial guidance is a direct result of our renewed focus on Feraheme sales growth and aggressive operating expense management,” commented William Heiden, president and chief executive officer of AMAG. “While I am pleased with the growth achieved in our U.S. Feraheme business this year, I believe that we can do even better. Feraheme represents a tremendous opportunity for AMAG and I want to ensure that we unlock its full potential -- by maximizing the number of adult IDA patients with chronic kidney disease who benefit from Feraheme today, and broadening that to all IDA patients next year, should we gain regulatory approval of an expanded label.”
Heiden continued, “Additionally, we have extended the international reach of Feraheme/Rienso with launches in Canada and Europe, we remain on-track for our fourth quarter sNDA filing in the U.S. for our Feraheme label expansion and are making progress in our search to acquire additional commercial products.”
Third quarter and Nine Month 2012 Financial Results (unaudited)
Total revenues for the quarter ended September 30, 2012 were $17.7 million, as compared to $17.6 million for the third quarter of 2011. For the nine months ended September 30, 2012, AMAG reported total revenues of $64.2 million, as compared to revenues of $46.3 million for the same period in 2011. The increase in total revenues for the nine-month period ended September 30, 2012 was due to increased physician demand for Feraheme and the recognition of a $15 million milestone payment from Takeda in 2012.
Net U.S. Feraheme product revenues for the third quarter of 2012 were $16.2 million and include approximately $2.1 million in revenues associated with changes in estimated Medicaid rebate and product returns reserves. These reductions in estimated reserves reflect AMAG's lower Medicaid claims and product returns than originally recorded since launch in 2009. For comparison, net U.S. Feraheme product revenues for the third quarter of 2011 were $15.6 million and included $3.0 million of revenues associated with a change in estimated Medicaid reserves.
Total cost of goods sold (COGS) for the quarter ended September 30, 2012 were $4.3 million, as compared to $2.7 million for the third quarter of 2011. Total COGS for the nine months ended September 30, 2012 were $10.2 million, as compared to $7.8 million for the same period in 2011. The increase in COGS for the nine months ended September 30, 2012 is primarily due to a $0.7 million increase in idle capacity charges and an additional $1.8 million in non-cash charges related to the closure of the company's Cambridge, MA manufacturing facility.
Total operating expenses, excluding COGS, for the quarter ended September 30, 2012 were $18.0 million, as compared to $32.1 million for the third quarter of 2011. Total operating expenses, excluding COGS, for the nine months ended September 30, 2012 were $67.5 million, as compared to $98.8 million for the same period in 2011. The decreases in total operating expenses in the 2012 periods were due to decreased research and development costs associated with the company's global IDA registration program and decreased selling, general and administrative expenses as the company realized the benefits of its streamlined cost structure.
For the quarter ended September 30, 2012, the company's net loss decreased 76% to $4.0 million, or a loss of $0.19 per basic and diluted share, as compared to a net loss of $16.6 million, or a loss of $0.78 per basic and diluted share, for the third quarter of 2011. AMAG's net loss for the nine months ended September 30, 2012 was $13.1 million, or a loss of $0.61 per basic and diluted share, as compared to a net loss of $58.5 million, or a loss of $2.76 per basic and diluted share for the same period in 2011.
Updated Annual 2012 Financial Guidance
The company is updating its 2012 full year financial guidance. AMAG now expects:
- Increased net Feraheme product revenue of $58 – $60 million, including the impact of changes in estimated reserves already recorded this year; and
- Reduced total operating expenses, excluding COGS, of $87 – $90 million.
AMAG confirms prior annual 2012 guidance for the following:
- COGS of approximately 20% – 24% of total product sales, which includes accelerated depreciation and idle capacity associated with the closure of the company's manufacturing facility;
- Cash milestones totaling $33 million associated with regulatory approvals and commercial launches in the EU and Canada, $18 million of which have already been received; and
- A 2012 year-end cash and investments balance of $225 – $230 million, not including the impact of a business development transaction.
Conference Call and Webcast Access
AMAG Pharmaceuticals, Inc. will host a conference call and webcast with slides today at 8:00 a.m. ET. To access the conference call via telephone, dial 877-412-6083 from the United States or 702-495-1202 for international access. A telephone replay of the conference call will be available from approximately 12:00 p.m. ET on November 1, 2012 until midnight November 8, 2012. To access the replay, dial 855-859-2056 from the United States or 404-537-3406 for international access. The passcode for the live call and the telephone replay is 37432497.
A live webcast of the conference call and accompanying slides will be accessible through the Investors section of the company's website at www.amagpharma.com beginning today at 8:00 a.m. ET. Following the conference call, the webcast replay will be available today at approximately 10:00 a.m. ET and will be archived on the AMAG Pharmaceuticals, Inc. website until midnight November 30, 2012.
In the United States, Feraheme® (ferumoxytol) Injection for Intravenous (IV) use is indicated for the treatment of iron deficiency anemia in adult chronic kidney disease (CKD) patients. Feraheme received marketing approval from the U.S. Food and Drug Administration on June 30, 2009 and was commercially launched by AMAG in the U.S. shortly thereafter. Ferumoxytol received marketing approval in Canada in December 2011, in the European Union in June 2012, and in Switzerland in August 2012. For additional product information, please visit www.feraheme.com.
About AMAG Pharmaceuticals, Inc.
AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG), a specialty pharmaceutical company focused on the development and commercialization of an intravenous iron to treat iron deficiency anemia (IDA). For additional company information, please visit www.amagpharma.com.
AMAG Pharmaceuticals and Feraheme are registered trademarks of AMAG Pharmaceuticals, Inc.
Rienso is a registered trademark of Takeda Pharmaceutical Company, Ltd.
1IMS Health Data (in grams) through the period ending September 30, 2012.
|AMAG Pharmaceuticals, Inc.|
|Condensed Consolidated Statements of Operations|
|(unaudited, amounts in thousands, except for per share data)|
|Three Months Ended Sept 30,||Nine Months Ended Sept 30,|
|Product sales, net||$||16,176||$ 15,802||$||44,304||$||39,905|
|License fee, collaboration and royalty revenues||1,566||1,753||19,930||6,437|
|Operating costs and expenses (1):|
|Cost of product sales||4,323||2,669||10,193||7,792|
|Research and development expenses||5,260||14,894||25,393||45,155|
|Selling, general and administrative expenses||12,160||17,230||40,442||53,690|
|Total operating costs and expenses||22,305||34,793||77,648||106,637|
|Operating income (loss)||(4,563||)||(17,238||)||(13,414||)||(60,295||)|
|Interest and dividend income, net||295||378||1,026||1,390|
|Other income (expense)||2||14||(1,469||)||(194||)|
|Net income (loss) before income taxes||(4,266||)||(16,846||)||(13,857||)||(59,099||)|
|Income tax benefit||299||215||793||611|
|Net income (loss)||$||(3,967||)||$ (16,631||)||$||(13,064||)||$||(58,488||)|
|Net income (loss) per share - basic and diluted||$||(0.19||)||$ (0.78||)||$||(0.61||)||$||(2.76||)|
|Weighted average shares outstanding used to compute net loss per share:|
|Basic and diluted||21,403||21,194||21,374||21,169|
|(1) Stock-based compensation included in operating costs and expenses:|
|Cost of product sales||$||52||$ 131||$||198||$||483|
|Research and development||473||84||1,420||1,365|
|Selling, general and administrative||1,525||1,487||3,694||6,950|
|AMAG Pharmaceuticals, Inc.|
|Condensed Consolidated Balance Sheets|
|(unaudited, amounts in thousands)|
|September 30, 2012||December 31, 2011|
Cash and cash equivalents
|Receivable from collaboration||777||428|
|Assets held for sale||2,300||-|
|Other current assets||7,627||6,288|
|Total current assets||241,137||240,031|
|Net property, plant & equipment||3,411||9,206|
|Accrued expenses and other short-term liabilities||16,674||28,916|
|Total current liabilities||27,544||38,994|
|Other long-term liabilities||2,136||2,438|
|Total long-term liabilities||42,760||47,634|
|Total stockholders' equity||174,704||180,596|
|Total liabilities and stockholders' equity||$||245,008||$||267,224|
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, our belief that “we can do better,” our expectation to submit a supplemental new drug application to the U.S. Food and Drug Administration by the end of 2012, our progress in our search to acquire additional products and our expected financial results for the 2012 fiscal year, 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: (1) uncertainties regarding our and Takeda's ability to successfully compete in the intravenous iron replacement market both in the U.S. and outside the U.S., (2) uncertainties regarding our ability to successfully and timely complete our clinical development programs and obtain regulatory approval for Feraheme in the broader IDA indication and in territories outside of the U.S., including the European Union, (3) the possibility that significant safety or drug interaction problems could arise with respect to Feraheme, (4) uncertainties regarding the ability to manufacture Feraheme, (5) uncertainties relating to our patents and proprietary rights, (6) uncertainty regarding our ability to acquire additional products for our portfolio, and (7) other risks identified in our Securities and Exchange Commission filings, including our Quarterly Report on Form 10-Q for the quarter ended June 30, 2012. We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made.
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.
AMAG Pharmaceuticals, Inc.
Amy Sullivan, 617-498-3303