AMAG Pharmaceuticals Inc.
) fourth quarter 2013 loss of 17 cents per share was wider than
the Zacks Consensus Estimate of a loss of 10 cents and the
year-ago loss of 14 cents per share. The wider loss was
attributable to higher expenses.
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Revenues during the reported quarter increased 2.7% to $21.7
million. The increase in revenues was primarily due to higher
product sales. Revenues also beat the Zacks Consensus Estimate of
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 fourth quarter of 2013, U.S. net sales of Feraheme
amounted to $19.0 million, up 32% year over year. The increase
was attributable to both price and volume growth. We note that
AMAG has an agreement with
) for Feraheme, in the EU and Canada. Rienso (EU trade name of
Feraheme) was launched in the EU and Canada during the fourth
quarter of 2012 for the same indication.
Total operating expenses in the quarter increased 4.7% year over
year to $25.7 million. While research and development (R&D)
expenses declined 16.7%, selling, general and administrative
(SG&A) expenses increased 25.1% in the reported quarter.
AMAG's full year 2013 loss of 49 cents per share was wider than
the Zacks Consensus Estimate of a loss of 39 cents but narrower
than the year-ago loss of 61 cents per share. The narrower
year-over-year loss was attributable to lower expenses.
Revenues during the year decreased 5.3% to $80.9 million. The
decrease in revenues was primarily due to higher license fee and
collaboration revenues recorded in 2012. Revenues nominally
missed the Zacks Consensus Estimate of $81 million.
Feraheme Label Expansion Update
Last month, AMAG received a huge blow in its effort to expand
Feraheme's label for a broader indication. The U.S. Food and Drug
Administration (FDA) declined to approve the company's
supplemental new drug application (sNDA) for Feraheme in the
present form and issued a complete response letter (CRL).
AMAG is looking to get Feraheme's label expanded as an
intravenous (IV) use for the treatment of IDA in all adults
suffering from CKD with a history of unsuccessful oral iron
therapy. The U.S. regulatory body has asked AMAG to conduct
additional clinical trials for the broader indication.
Moreover, the FDA recommended the company to evaluate alternative
dosing and/or administration of Feraheme. AMAG intends to work
closely with the FDA to decide on the future course of action.
AMAG believes that the successful label expansion of Feraheme may
double its market opportunity to over $500 million annually.
Takeda also filed a similar label expansion application in the EU
for Rienso. The company expects a decision during the second half
of 2014. Rienso's successful label expansion in the EU will
trigger milestone payments and tiered, double-digit royalties on
sales of the drug to AMAG.
AMAG provided its financial guidance for 2014. The company
expects to generate total revenue in the range of $88-$100
million excluding the potential milestone payment from Takeda.
The Zacks Consensus Estimate for 2014 revenues of $107 million is
above the company's guidance range.
Feraheme U.S. sales for the year are expected in the range of
$75-$85 million. AMAG also expects to generate around $13−$15
million of revenues from other sources. The company's operating
expense guidance is in the range of $80-$85 million (R&D
expenses: $20−$22 million; SG&A expenses: $60−$63 million).
AMAG intends to expand its product portfolio by way of
acquisitions and in-licensing deals.
Though pleased with Feraheme's performance in the fourth quarter
of 2013, we are disappointed with the CRL on Feraheme's label
expansion. The CRL will further delay the approval of Feraheme in
the broader indication. Moreover, the additional trials as
mandated by the FDA will lead to a surge in the company's
operating expenses. We expect investor focus to stay on updates
regarding the company's efforts to expand Feraheme's label.
AMAG currently carries a Zacks Rank #3 (Hold). Some better-ranked
). Both the stocks hold a Zacks Rank #1 (Strong Buy).