AMAG Pharmaceuticals Inc.
) posted second quarter 2012 earnings of 20 cents per share,
narrower than the Zacks Consensus Estimate which predicted a loss
of 39 cents and the year-ago loss of 92 cents per share. Higher
revenues and lower operating expenses boosted earnings.
Quarterly revenues climbed 101.4% to $31.0 million, well above
the Zacks Consensus Estimate of $19 million. Revenues were boosted
by a $15 million milestone payment received from
) on the EU approval of Rienso (EU trade name of Feraheme) in June
AMAG records revenues mainly from Feraheme, an injectable drug
for intravenous use as iron replacement therapy for the treatment
of iron deficiency anemia (IDA) in adults suffering from chronic
kidney disease (CKD).
In the reported quarter, net sales of Feraheme amounted to $14.1
million, up 10% from the year-ago quarter.
AMAG is planning to launch Rienso in both Canada and the EU by
year end. Takeda will make a milestone payment of $15 million to
AMAG on the first sales of Rienso in Europe. AMAG will receive
tiered, double-digit royalties on sales of Rienso in the licensed
AMAG is working on expanding Feraheme's label. The company
reported positive phase III data from two studies conducted in
patients with IDA regardless of the underlying cause. AMAG intends
to submit a supplemental new drug application (sNDA) to the US Food
and Drug Administration (FDA) for this indication by the end of
AMAG also received encouraging news on the competitive front
with Luitpold Pharmaceuticals, Inc. receiving a complete response
letter from the FDA for Injectafer which was under review for the
treatment of IDA. Any delay in the entry of competition bodes well
Total operating cost (including cost of goods sold) in the
quarter amounted to $26.0 million, down 27% from the year ago
period. The decrease was attributable to the restructuring efforts
of the company. Moreover, lower research and development (R&D)
expenses related to the company's global IDA clinical program
helped reduce operating expenses. Both R&D expenses and
selling, general and administrative (SG&A) expenses were on the
downswing in the reported quarter.
Feraheme Outlook Modified
AMAG updated its guidance for 2012. Feraheme sales are expected
to amount to $55 - $58 million for 2012 (old guidance: $53 - $57
million). Guidance excludes any royalties and sales in the ex-US
Further, AMAG continues to expect operating expenses (excluding
cost of goods sold) in the range of $90 - $95 million, which
includes employee-related restructuring charges and charges related
to closure of company's manufacturing facility.
The company expects to exit 2012 with cash and investments of
$225 - $230 million, which excludes cash utilized for acquiring and
in-licensing additional marketed products.
We currently have an Outperform recommendation on AMAG, which
carries a Zacks #2 Rank (short-term 'Buy' rating). We are
encouraged by the company's efforts to cut costs and drive
efficiencies through the streamlining of operations. We expect
investor focus to remain on Feraheme's performance and the
company's efforts to expand the product's label.
AMAG PHARMA INC (AMAG): Free Stock Analysis
(TKPYY): ETF Research Reports
To read this article on Zacks.com click here.