AMAG Narrows Loss, Maintains View - Analyst Blog

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AMAG Pharmaceuticals Inc. 's ( AMAG ) fourth quarter 2012 loss of 14 cents per share was narrower than the year-ago loss of 71 cents but wider than the Zacks Consensus Estimate of a loss of 6 cents per share. Higher revenues resulted in the narrower year-over-year loss.

Quarterly revenues climbed 41.8% to $21.1 million, below the Zacks Consensus Estimate of $23 million. Revenues in the fourth quarter of 2012 benefited from higher Feraheme sales.

AMAG's full-year 2012 loss of 68 cents per share was narrower than the year-ago loss of $3.47. The company's loss during the year was, however, wider than the Zacks Consensus Estimate of a loss of 66 cents. Revenues for the full-year 2012 came in at $85.4 million, up 39.4%.

Quarterly Highlights

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 $14.4 million, up 12.1% from the year-ago quarter.

AMAG has a partnership agreement with Takeda Pharmaceuticals ( TKPYY ) for Feraheme, in the EU and Canada. We note that Rienso (EU trade name of Feraheme) was launched in the EU and Canada during the fourth quarter of 2012. AMAG received milestone payments of $33 million form Takeda on the approval and launch of the drug in the EU and Canada.

AMAG is working on expanding Feraheme's label. In Dec 2012, the company submitted a supplemental new drug application (sNDA) to the US Food and Drug Administration (FDA) for an intravenous (IV) dose of Feraheme. The label expansion may double the market opportunity in the US for the product.

Total operating cost (including cost of goods sold) in the quarter amounted to $25.2 million, down 26.9% from the year-ago period. Both research and development (R&D) expenses and selling, general and administrative (SG&A) expenses were on the downtrend in the reported quarter.

Lower R&D expenses related to the completion of the company's global IDA clinical program along with lower SG&A expenses due to lower promotional expenses helped reduce operating expenses.

2013 Outlook

AMAG reiterated its previously announced guidance for 2013. The company expects to generate total revenues in the range of $73-$77 million in 2013. The Zacks Consensus Estimate of $78 million is a tad higher than the company's guidance. The company expects Feraheme US sales to be within $63 million and $67 million.

AMAG also expects to generate around $10 million as royalties and product sales related to ex-US sales of Feraheme/Rienso and the recognition of milestones.

The company expects to incur operating expenses of around $78-$82 million (research and development expenses of $24-$27 million and selling, general and administrative expenses of $54-$57 million). The company expects lower clinical trial costs in 2013 which will be offset by new investments in a lower-cost production process and pre-launch investments for the expansion of Feraheme's label.

AMAG expects to exit 2013 with cash and investments of around $206-$211 million.

We believe that the company's guidance for 2013 is achievable. We expect investor focus to remain on Feraheme's performance and the company's efforts to expand the product's label.

AMAG currently carries a Zacks Rank #3 (Hold). Other stocks such as BioDelivery Sciences International Inc. ( BDSI ) and Cempra, Inc. ( CEMP ) currently look more attractive in the pharma space carrying a Zacks Rank #2 (Buy).



AMAG PHARMA INC (AMAG): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: AMAG , BDSI , CEMP , IDA , TKPYY

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