Fourth Quarter Beat for MDCO - Analyst Blog

By Zacks Equity Research,

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The Medicines Company ( MDCO ) reported fourth-quarter earnings of 47 cents per share, including the impact of stock-based compensation expense. Fourth-quarter earnings were well above the year-ago earnings of 27 cents and the Zacks Consensus Estimate of 24 cents.

Higher revenues led to the earnings beat. Revenues, up 10.5% at $132.2 million, were well above the Zacks Consensus Estimate of $125 million.

Full year earnings came in at $1.37 per share (including the impact of stock-based compensation expense), well above the year-ago earnings of $1.15. 2011 earnings, however, missed the Zacks Consensus Estimate of $2.03 per share. Meanwhile, 2011 revenues increased 10.7% to $484.7 million, beating the Zacks Consensus Estimate of $478 million.

The Quarter in Detail

Angiomax US sales increased 10.9% to $124.2 million during the fourth quarter. Ex-US sales increased 2.6% to $7.9 million. There was some inventory stocking ahead of a 7% price increase in December.

Angiomax, acquired from Biogen Idec Inc. ( BIIB ), is the lead product at The Medicines Company. Acquired in 1996, Angiomax is used as an anticoagulant in patients undergoing coronary angioplasty.

The Medicines Company launched two new products/formulations in the third quarter of 2011 -- a ready-to-use formulation of Argatroban as well as a new formulation of Cleviprex (clevidipine). Argatroban, however, ran into some production problems in the fourth quarter of 2011. The company is working with its partner to resolve the issue and resume supply in 2012.

R&D spend increased 7.1% to $33.3 million. SG&A expenses declined 6.7% to $34.9 million.

2012 Guidance

The Medicines Company expects revenues to grow 9% - 11% in 2012. While sales in the US will be driven by Angiomax share gains in high-risk patients, the company expects growth in Europe to pick up as well. The Zacks Consensus Revenue Estimate for 2012 is $537 million, representing y-o-y growth of 10.8%.

The company expects to generate 22% - 23% of 2012 net revenues in the first quarter and 46% - 48% in the first half of the year.

R&D spend is expected to be about 20% of net revenues. A major part (60%) of the R&D dollars will be spent in the first half of the year mainly due to the phase III development of Cangrelor and oritavancin.

SG&A spend is expected to be flat to slightly up compared to 2011.

Pipeline Update

The Medicines Company also provided an update on its pipeline candidates. Results from the BRIDGE study on Cangrelor were reported in early November. The company intends to discuss these results with the FDA in the second quarter of 2012. Moreover, an interim analysis of the ongoing PHOENIX trial with Cangrelor is scheduled to take place in the third quarter.

Meanwhile, oritavancin is in a phase III program, SOLO (SOLO-1 and SOLO-2), for the treatment of acute bacterial skin and skin structure infections (ABSSI). The Medicines Company said that it has decided to accelerate the SOLO-1 trial.

The Medicines Company expects to finish patient enrollment by the third quarter of this year and present results in the fourth quarter. If results are positive, the company intends to speed up the other study, SOLO-2, so that a new drug application (NDA) can be filed in mid-2013.

The company intends to file for approval of MDCO-157 using a Section 505(b)(2) NDA in 2013. Clinical studies are expected to commence in mid-12. MDCO-157 is a Captisol-enabled intravenous (IV) formulation of clopidogrel (the active ingredient in Plavix).

The Medicines Company's early-stage candidates include MDCO-216 and MDCO-2010. The company acquired worldwide rights to MDCO-216 from Pfizer ( PFE ).

MDCO-216 is a naturally occurring variant of a protein that could be used to reverse the development of arterial plaque development and reduce the risk of heart problems in patients with acute coronary syndrome (ACS). If developed successfully, MDCO-216 should fit well within The Medicines Company's product portfolio. The company expects to commence a phase I study in the second half of 2012.

MDCO-2010, which became a part of The Medicines Company's portfolio through its acquisition of Curacyte, is a small molecule serine protease inhibitor. The company expects to commence a phase IIb study with MDCO-2010 in the US in the first quarter of 2012.

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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 Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: BIIB , MDCO , PFE

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