20% Growth Results in Record U.S. Feraheme Sales
Lumara Health Acquisition on Track to Close in Fourth Quarter
Conference call scheduled for 8:00 a.m. EDT today
WALTHAM, Mass., Oct. 30, 2014 (GLOBE NEWSWIRE) -- AMAG Pharmaceuticals, Inc. (Nasdaq:AMAG), a specialty pharmaceutical company, today reported unaudited consolidated financial results for the third quarter and nine months ended September 30, 2014. Total revenues for the third quarter of 2014 were $25.5 million, of which $22.5 million were U.S. net Feraheme® (ferumoxytol) product sales, the highest Feraheme quarterly sales since launch in 2009. AMAG ended the third quarter with $386.2 million in cash and investments.
“Our ability to deliver another quarter of record sales in the fifth year since Feraheme’s launch demonstrates that more physicians across the U.S. are prescribing Feraheme for the treatment of iron deficiency anemia (IDA) in a growing number of patients with chronic kidney disease (CKD),” said William Heiden, president and chief executive officer. “In addition to driving growth of Feraheme, we also are executing on our long-term strategic plan to expand and diversify our product portfolio through our recently announced agreement to acquire Lumara Health Inc. We believe the Lumara Health business will facilitate future product acquisitions in an attractive new therapeutic area and is an excellent strategic fit with our Feraheme market expansion plans, if regulatory approval for the broader IDA indication is sought and received.”
Business Highlights
- The company reported record U.S. net Feraheme product sales of $22.5 million in the third quarter of 2014, compared to $19.3 million in the third quarter of 2013, representing a 20% increase (excluding a $0.6 million reduction in reserves for Medicaid rebates recorded in the third quarter of 2013). This growth was driven by higher volume and improved net revenue per gram of Feraheme, each up 10% from the third quarter of 2013.
- Total Feraheme provider demand for the third quarter of 2014 was approximately 37,000 grams, compared to approximately 36,000 in the third quarter of 2013.1 Several strategies led to the sales success during the third quarter of 2014, including greater penetration in the hospital segment and effective commercial contracting strategies.
- Feraheme gross margins held relatively steady at 88% in the third quarter of 2014, compared to 87% in the third quarter of 2013. Reported operating expenses for the third quarter of 2014 were $18.2 million. Excluding the favorable impact of a $3.7 million adjustment to MuGard-related contingent consideration expense in the quarter, operating expenses were $21.9 million, representing a 13% increase from the corresponding period in 2013 and a 5% increase from the second quarter of 2014. The increase in operating expenses is due largely to costs associated with the planned acquisition of Lumara Health.
- On September 29, 2014, AMAG announced that it had entered into a definitive agreement to acquire Lumara Health Inc., a privately held pharmaceutical company specializing in women’s health. Lumara Health markets the fast-growing product Makena® (hydroxyprogesterone caproate injection), which was granted 7-year orphan drug exclusivity in February 2011 and is the only FDA-approved product indicated to reduce the risk of preterm birth in women who are pregnant with one baby and who have spontaneously delivered one baby preterm in the past.
- AMAG will acquire Lumara Health for $675 million ($600 million in cash and $75 million in AMAG stock) and additional contingent consideration of up to $350 million based on achievement of certain sales milestones, including $100 million payments at $300 million, $400 million and $500 million in net sales in non-overlapping 12-month periods.
- Based on the last three months ended August 31, 2014, the combined pro forma company (AMAG and Lumara Health) is on a run rate to achieve annualized total revenue of approximately $288 million and annualized pro forma adjusted EBITDA of approximately $147 million2, including $20 million in expected annual synergies.
- Shipments of Makena for the third quarter were 20,421 vials, representing 14% growth over the quarter ended June 30, 2014. AMAG believes that attractive market dynamics, along with the implementation of a new patient-centric business strategy aimed at expanding patient access to and compliance with the product, has contributed to the significant recent growth of Makena.
“AMAG’s acquisition of Lumara Health will position the combined company for accelerated top-line growth and significant cash earnings, provide further business diversification and create value for our shareholders,” said Frank Thomas, executive vice president and chief operating officer. “Plans for integrating these two businesses are well underway, and we believe they will allow us to efficiently and quickly capture value following the close of the acquisition. We also feel confident that we are on track to complete the loan syndication process and close the transaction by the end of the year.”
Third Quarter and Nine Month 2014 Financial Results (unaudited)
The company reported record U.S. net Feraheme product sales of $22.5 million for the third quarter of 2014, compared to $19.3 million in the third quarter of 2013. For the nine months ended September 30, 2014, AMAG reported U.S. net Feraheme product sales of $62.1 million, compared to $52.4 million for the corresponding period in 2013.
Total revenues for the quarter ended September 30, 2014 were $25.5 million, as compared to $21.6 million for the third quarter of 2013. For the nine months ended September 30, 2014, AMAG reported total revenues of $71.1 million, as compared to revenues of $59.1 million for the corresponding period in 2013.
Feraheme cost of goods sold (COGS) for the quarter ended September 30, 2014 were $2.8 million, or 12% of net Feraheme product sales, compared to $2.5 million, or 13% of net Feraheme product sales for the quarter ended September 30, 2013. For the nine months ended September 30, 2014, Feraheme COGS were $8.2 million, or 13% of net Feraheme product sales, compared to $8.4 million, or 16% of net Feraheme product sales, for the corresponding period in 2013.
Total operating expenses for the quarter ended September 30, 2014 were $18.2 million, compared to $19.5 million for the third quarter of 2013. Total operating expenses for the nine months ended September 30, 2014 were $63.0 million, as compared to operating expenses of $58.1 million for the corresponding period in 2013.
The company reported net income of $1.5 million, or $0.07 per basic share, and $0.06 per diluted share, for the quarter ended September 30, 2014, as compared to net loss of $0.1 million, or $0.01 per basic and diluted share, for the third quarter of 2013. AMAG reported a net loss for the nine months ended September 30, 2014 of $7.2 million, or $0.33 per basic and diluted share, as compared to a net loss of $5.9 million, or $0.28 per basic and diluted share, for the corresponding period in 2013.
As of September 30, 2014, the company’s cash and investments totaled approximately $386.2 million, reflecting net cash usage during the third quarter of approximately $0.3 million. The Company expects to have approximately $100 million in cash and investments following the close of the Lumara Health transaction.
Conference Call and Webcast Access
AMAG Pharmaceuticals, Inc. will host a conference call and webcast with slides today at 8:00 a.m. EDT, during which management will discuss the company’s financial results, the acquisition of Lumara Health and commercial progress. To access the conference call via telephone, please dial (877) 412-6083 from the United States or (702) 495-1202 for international access. A telephone replay will be available from approximately 11:00 a.m. ET on October 30, 2014 through midnight November 6, 2014. To access a replay of the conference call, dial (855) 859-2056 from the United States or (404) 537-3406 for international access. The pass code for the live call and the replay is 25342306.
The call will be webcast with slides and accessible through the Investors section of the company’s website at www.amagpharma.com. The webcast replay will be available from approximately 11:00 a.m. ET on October 30, 2014 through midnight on November 29, 2014.
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