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AMAG Q4 Loss Narrower Than Expected, Revenues Lag Estimates

Zacks Equity Research

AMAG Pharmaceuticals, Inc. AMAG incurred loss from continuing operations of 60 cents per share in the fourth quarter of 2018 against earnings of 2 cents reported in the year-ago quarter. Moreover, the figure was narrower than the Zacks Consensus Estimate of a loss of 98 cents.

Quarterly revenues came in at $88.1 million, down approximately 31.4% from $128.5 million in the year-ago quarter. The top line also missed the Zacks Consensus Estimate of $90.1 million.

Shares of AMAG have rallied 21.7% in the past year versus the industry’s decline of 14.1%.

Quarter in Detail

AMAG completed the sale of Cord Blood Registry (CBR) last August. Hence, CBR's results have been excluded from the company’s financial results. The company’s long-term strategy focuses on consistent growth and further diversification of its pharmaceutical portfolio.

Makena sales came in at $46.9 million, down 53.2% year over year due to supply disruptions with the subcutaneous auto-injector that resulted in reducing channel inventory and pulled down fourth-quarter net revenues. However, AMAG expects first-quarter 2019 revenues to be positively impacted as inventory levels returned to normal.

Combined sales of Feraheme and MuGard amounted to $35.3 million, up almost 33% year over year. Growth in Feraheme was primarily driven by a strong commercial engagement with customers leading to more client wins by 20%. Intrarosa generated sales of $5.9 million as compared to $1.5 million in the year-ago quarter. The surge in sales can be attributed to an increase in total prescriptions.

Costs and expenses from continuing operations including costs of product sales and services were $107 million, down 24.3% from the year-earlier quarter.

Discontinued Operations

As a result of the sale of CBR, AMAG paid off $475 million of senior notes, eliminating cash interest expense of approximately $40 million per year. CBR has been classified under discontinued operations for accounting purposes.

2019 Outlook

AMAG expects total full-year revenues in the range of $365-$415 million, which is in line with the preliminary results issued on Jan 7, 2019. The Zacks Consensus Estimate stands at $371.8 million, falling well within the guided range.

Other Updates

AMAG acquired AMAG-423, an orphan drug candidate for the treatment of severe preeclampsia, reaffirming its focus on delivering innovative therapies that address unmet medical needs. The company plans to complete full enrollment and start phase IIb/IIIa study on AMAG-423 by this year-end.

AMAG also announced that the FDA has accepted the new drug application (NDA) filling for Vyleesi and has set an action date of Jun 23, 2019. Vyleesi is being evaluated for the treatment of hypoactive sexual desire disorder (HSDD) in pre-menopausal women. An approval of this candidate will be a big boost to the company as it caters to a huge unmet medical need for women. On approval, AMAG plans to launch Vyleesi in the second half of 2019.

Further, last month, AMAG closed the acquisition of Connecticut-based privately held Perosphere Pharmaceuticals Inc., which will add the latter’s investigational candidate, ciraparantag, to its portfolio. This move will strengthen the company’s expertise in hematology pipeline.

AMAG Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

AMAG Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | AMAG Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

AMAG currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include Celgene Corporation CELG, Ligand Pharmaceuticals Incorporated LGND and Aduro Biotech, Inc. ADRO. While Celgene and Ligand sport a Zacks Rank #1 (Strong Buy), Aduro carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Celgene’s earnings estimates have been revised 4.7% upward for 2019 over the past 60 days.

Ligand’s earnings estimates have moved 2.9% north for 2019 over the past 60 days.

Aduro’s loss per share estimates have been narrowed 35.1% for 2019 in the last 60 days.

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