It has been about a month since the last earnings report for AMAG Pharmaceuticals (AMAG). Shares have added about 9.7% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is AMAG Pharmaceuticals due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
AMAG Q3 Loss Wider Than Expected, Revenues Lag Estimates
AMAG incurred a loss of 70 cents per share in the third quarter of 2019, wider than the Zacks Consensus Estimate of a loss of 51 cents but narrower than the year-ago quarterly loss of 77 cents.
Moreover, quarterly revenues of $84.1 million were down approximately 31.2% from $122.2 million a year ago. The top line also missed the Zacks Consensus Estimate of $89 million.
Quarter in Detail
Makena subcutaneous auto-injector recorded sales of $41.3 million, reflecting an increase of 5.4% year over year. The revenue figure was consistent on a sequential basis.
Notably, in second-quarter 2019, AMAG made a mutual decision with Prasco to exit the generic intramuscular (IM) market due to the ongoing supply issues and increased generic competition. As a result, Makena IM generated negative revenues in the third quarter compared with the second quarter, which witnessed a significant loss of market share for the IM brand.
Feraheme sales were $44.2 million in the third quarter, accounting for a 19.8% rise year over year. Intrarosa generated sales of $5.6 million in the reported quarter compared with $4.9 million in the year-ago period.
Operating expenses including the cost of product sales were $102.2 million, down 27.8% from the year-earlier quarter. During the third quarter, the company did not recognize any Makena IM amortization.
AMAG lowered the mid-point of its revenue guidance for 2019. The company now expects full-year revenues of $320-$330 million compared with the previous estimate of $325-$355 million, mainly due to trimmed expectations for Intrarosa and the negative IM revenues.
We remind investors that in October 2019, AMAG announced that the FDA’s Bone, Reproductive and Urologic Drugs Advisory Committee analyzed data from the PROLONG study on Makena. The drug is approved to reduce preterm birth in pregnant women, who have had a prior spontaneous preterm delivery. Nine of 16 advisory committee members voted to recommend the FDA to pursue the withdrawal of Makena from the market while the rest voted in favor of keeping the product in the market under an accelerated approval and requesting a new confirmatory trial. The regulatory agency will consider the advisory committee's recommendation when making its decision but is not bound by the same.
In a separate press release, the company announced that as of now, Makena’s approval and product label are intact.
Meanwhile, in September 2019, AMAG launched Vyleesi (bremelanotide injection), a melanocortin receptor agonist indicated for the treatment of acquired, generalized hypoactive sexual desire disorder (HSDD) in premenopausal women. Vyleesi is the first treatment for this patient population that can be self-administered in anticipation of sexual activity. The drug was approved in June 2019.
Per the company, more than 1,300 healthcare providers prescribed Vyleesi adding to above 3,000 prescriptions received by specialty pharmacy partners to date.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 33.71% due to these changes.
At this time, AMAG Pharmaceuticals has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise AMAG Pharmaceuticals has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
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