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AMAG Pharma (AMAG) Incurs Loss in Q4, Revenues Lag Estimates


AMAG Pharmaceuticals, Inc. AMAG reported adjusted earnings of $1.36 per share in the fourth quarter of 2016, up from $1.04 in the year ago quarter.

Moreover, including one-time and special items, reported loss was 31 cents per share in the fourth quarter of 2016 against profit of 21 cents in the year-ago quarter. This missed the Zacks Consensus Estimate of earnings of 24 cents.

The company’s quarterly revenues came in at $151.6 million, up approximately 39.4% from the year-ago quarter figure of $108.7 million. The upside was driven by impressive sales for both Makena and Feraheme, and the recognition of service revenues from Cord Blood Registry (CBR). CBR is a stem cell company which AMAG acquired in 2015. Reported revenues, however, missed the Zacks Consensus Estimate of $152.3 million.

AMAG’s share price decreased 35% year to date, while the Zacks classified Medical – Biomedical and Genetics industry gained 4.5%.

Quarter in Detail

Makena sales came in at $97.2 million, up 44.3% year over year, primarily driven by higher volumes due to the successful launch of the single-dose, preservative-free formulation.

Combined sales of Feraheme and MuGard amounted to $26.6 million, up 13.4%. During the quarter, service revenues from CBR came in at $27.7 million, higher than $17 million in the year-ago quarter.

Total adjusted costs and expenses increased almost 28% to $75.6 million.

2016 Results

For 2016, the company reported a loss of 7 cents per share as against earnings of 93 cents in 2015. This missed the Zacks Consensus Estimate of earnings of 47 cents.

For the full year, revenues came in at $532.1 million, up 27.2% year over year.

Key Developments

Concurrent with the press release, AMAG bought the U.S. commercial rights to Endoceutics, Inc.’s drug Intrarosa (prasterone). Intrarosa is the only FDA-approved non-estrogen product for the treatment of moderate-to-severe dyspareunia (pain during intercourse). At closing, AMAG will pay Endoceutics $50 million of total upfront consideration and issue Endoceutics 600,000 unregistered shares of AMAG common stock.

Further, AMAG will pay Endoceutics up to $10 million upon delivery of adequate launch quantities of Intrarosa and $10 million upon the completion of the first year of the effective date of the agreement. AMAG expects to launch Intrarosa in the U.S. in mid-2017.

Earlier this month, AMAG closed its previously announced agreement with Palatin Technologies, Inc. PTN ) for the exclusive U.S. rights to develop and commercialize Rekynda (bremelanotide). Rekynda is designed for the on-demand treatment of hypoactive sexual desire disorder (HSDD) in pre-menopausal women. Rekynda has been successfully evaluated in two phase III studies.

A New Drug Application for Rekynda is expected to be filed in early 2018, with an anticipated approval and launch by early 2019.Moreover, the company also announced top line PK data for Makena subcutaneous auto-injector program earlier this month. AMAG also confirmed its plans to submit supplemental New Drug Application (sNDA) in the second quarter of 2017, with an anticipated FDA decision and product launch in the fourth quarter of 2017.

Our Take

Acquisitions of Makena and CBR proved to be huge positives for the company. The addition of Intrarosa and Rekynda will allow AMAG to address key needs of women’s healthcare, with three potential new product launches over the next two years, starting with Intrarosa in 2017, followed by the Makena subcutaneous auto-injector and Rekynda, if approved.

AMAG Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

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

Zacks Rank & Key Picks

AMAG currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Sunesis Pharmaceuticals SNSS and GlaxoSmithKline plc GSK. While Sunesis sports a Zacks Rank #1 (Strong Buy), GlaxoSmithKline carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sunesis’ loss estimates narrowed by 5.06% and 8.80% for 2016 and 2017, respectively over the the past 30 days. Also, it recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%.

GlaxoSmithKline’s earnings estimates increased from $2.71 to $2.72 for 2017 and from $2.80 to $2.84 for 2018, over the last seven days. While the company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 11.03%, its share price increased 4.1% year to date.

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