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Medicines Company (MDCO) Incurs Wider-Than-Expected Q3 Loss

Zacks Equity Research

The Medicines Company MDCO reported third-quarter 2019 loss of 92 cents per share, wider than the Zacks Consensus Estimate of a loss of 84 cents and the year-ago loss of 74 cents. The reported loss includes share-based compensation and other non-cash items. Adjusted loss for the quarter widened 2.8% year over year to 72 cents per share.

The Medicines Company’s shares fell 4.7%, following the earnings release on Oct 30. However, shares of the company have soared 186.5% so far this year against the industry’s decrease of 0.9%.

In the reported quarter, the Medicines Company did not generate any revenues. The Zacks Consensus Estimate for the metric was pegged at $7.5 million. In the year-ago quarter, the company had recorded negative revenues due to changes in estimated net sales reserves and returns related to the sale of the company’s Angiomax brand.

The Medicines Company divested all its marketed products, namely Angiomax, Vabomere, Orbactiv and Minocin in 2018 as part of its restructuring activities to focus solely on developing its late-stage candidate, inclisiran. This explains the absence of revenues in the third quarter.

Adjusted selling, general and administrative expenses (SG&A) rose more than 300% year over year to $16 million in the reported quarter. Moreover, adjusted research and development expenses (R&D) increased 28.2% to $40.9 million.

The company’s cash and cash equivalents as of Sep 30, 2019 totaled $265.9 million compared with $319.3 million on Jun 30, 2019. The company believes that its existing cash balance will enable it to fund operating expenses through the second half of 2020.

Pipeline Update

The Medicines Company has one promising candidate — inclisiran (hypercholesterolemia) — in its pipeline. The company along with partner Alnylam Pharmaceuticals, Inc. ALNY is evaluating inclisiran in several phase III ORION studies for treating patients with atherosclerotic cardiovascular disease (“ASCVD”) and elevated bad cholesterol (LDL-cholesterol).

During the quarter, The Medicines Company successfully completed three pivotal phase III studies, ORION-9, ORION-10 and ORION-11, evaluating inclisiran in patients with heterozygous familial hypercholesterolemia (HeFH) and ASCVD.

In September, the company announced detailed data from the ORION-11 study which that twice a year administration of inclisiran achieved a placebo-adjusted 54% reduction in LDL-C levels. The study evaluated inclisiran in patients with ASCVD or ASCVD-risk equivalents and elevated LDL-C, following treatment with maximum tolerated dose of statin therapy alone or in combination with Merck’s MRK Zetia. Detailed data from ORION-9 and ORION-10 studies will be presented at the American Heart Association Scientific Sessions in Philadelphia scheduled to be held in November.

The company expects to file a new drug application seeking approval of inclisiran in the United States in the fourth quarter of 2019 as well as a marketing authorization application in the EU during the first quarter of 2020.

The Medicines Company Price, Consensus and EPS Surprise

 

The Medicines Company Price, Consensus and EPS Surprise

The Medicines Company price-consensus-eps-surprise-chart | The Medicines Company Quote

Zacks Rank & Stock to Consider

The Medicines Company currently carries a Zacks Rank #3 (Hold).

Acorda Therapeutics ACOR is a better-ranked stock in the healthcare sector, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Acorda’s loss estimates narrowed from $2.78 to $2.18 for 2019 and from $3.42 to $1.95 for 2020 over the past 30 days.

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