AMAG Trims Loss, Sales Remain Weak - Analyst Blog
29 7월 2011 - 12:15AM
Zacks
AMAG Pharmaceuticals Inc. (AMAG) posted a loss
of 92 cents per share during the second quarter of fiscal 2011,
narrower than the Zacks Consensus Estimate of a loss of $1.08 per
share as well as the year-ago loss of $1.01 per share. The
moderating loss was due to lower operating expense which countered
the top-line weakness.
The Quarter in Detail
Second quarter 2011 revenues of $15.4 million were down 18.2%
year over year and also missed the Zacks Consensus Estimate of $16
million. Revenues were hit by dull sales of AMAG’s only marketed
drug, Feraheme, in the dialysis segment. Feraheme is an injectable
drug for intravenous use as an iron replacement therapy for the
treatment of iron deficiency anemia (IDA) in adult patients
suffering from chronic kidney disease (CKD).
Sales of Feraheme, however, climbed 17.4% sequentially to $12.8
million from $10.9 million in the prior quarter due to a 24%
increase in provider demand particularly from the non-dialysis
segment.
Total Feraheme provider demand and launch incentive program
utilization gained sequentially to approximately 25,000 grams, as
improvement in the non-dialysis segment made up for the virtual
disappearance of dialysis sales in the quarter. Dialysis sales were
affected by changes in dialysis reimbursement which went into
effect from January 2011. Given expectations of lower utilization
due to bundling, Feraheme utilization in the dialysis setting has
been weak since the second quarter of 2010.
Consequently, the company is currently focusing on growing
Feraheme utilization in non-dialysis dependent CKD patients in the
hematology/oncology segment where a large number of such patients
are being treated. In the reported quarter, AMAG captured 23% of
the hematology/oncology market, not far behind the company’s aim to
capture 25% of this market by the end of 2011.
Total operating costs in the quarter were $35.6 million, down
12.5% over the prior year due to decreased commercialization costs
for Feraheme.
Feraheme Update
In June 2011 AMAG announced a label update for its lead drug
Feraheme. The label update includes among other items a decrease in
the observation time, from 60 minutes to 30 minutes, of patients
administered with Feraheme for signs and symptoms of
hypersensitivity. We believe that the decrease in observation
period is a positive development, which combined with the faster
dosing schedule of Feraheme, will help differentiate the drug from
other competing therapies in the market.
AMAG is currently enrolling patients for its global
registrational program for Feraheme for IDA treatment irrespective
of the underlying cause. The program is 65% enrolled and the
company intends to complete enrollment for the program by the end
of 2011.
AMAG and Allos Merger Update
AMAG has entered into an agreement to merge with Colorado based
Allos Therapeutics (ALTH) in an all stock deal
that has a total equity value of $686 million. The deal is expected
to close by the end of the year, subject to shareholder approval.
The deal will bring together AMAG’s and Allos’ sole marketed
products, Feraheme and Folotyn, respectively. Folotyn is marketed
for the treatment of patients with relapsed or refractory
peripheral T-cell lymphoma (PTCL).
At the second quarter conference call, management provided
further update on the deal besides details provided earlier. The
merger is expected to benefit both companies. The combined entity
is expected to gain from a strong balance sheet which will enable
it to diversify its product portfolio and enter into business
reinvestments. Together, AMAG and Allos would achieve break even
cash flow in 2013 and thereafter generate incremental cash flows of
$20 million by the end of 2013 and approximately $50 million by
2016. Management does not expect the cash balance to ever fall
below $220 million.
In 2013, total cash operating expenses of the combined entity
are expected to be approximately $120 million lower than a combined
cost base of $215–$230 million of the two companies in 2011.
Revenue of the combined company in 2013 is expected to be $125
million (Folotyn: $55 million and Feraheme: $70 million). All
forecasts exclude the potential impact from upside opportunities
like Feraheme IDA approval in the EU and the US, potential
partnership milestone payments, Folotyn label expansions and
Folotyn EU approval in 2012.
Moreover, management believes the deal makes commercial sense as
83% of hematology/oncology (an area of high interest for AMAG)
doctors who treat PTCL also treat IDA and CKD patients, thus
expanding Feraheme’s access in CKD as well as future broad
indications in IDA. A single sales representative can sell both the
products. On the other hand, Folotyn sales will benefit from AMAG’s
higher number of sales representatives to market the drug.
Our Recommendation
We currently have a Neutral recommendation on the stock. The
stock carries a Zacks #3 Rank (short term “Hold” rating). We prefer
to wait until more visibility is obtained on Feraheme’s progress
despite the improving trend in provider demand in the non-dialysis
category. Though we like the AMAG/Allos pact, we prefer to remain
on the sidelines due to potential execution risk.
ALLOS THERAPEUT (ALTH): Free Stock Analysis Report
AMAG PHARMA INC (AMAG): Free Stock Analysis Report
Zacks Investment Research
Allos Therapeutics, Inc. (MM) (NASDAQ:ALTH)
과거 데이터 주식 차트
부터 9월(9) 2024 으로 10월(10) 2024
Allos Therapeutics, Inc. (MM) (NASDAQ:ALTH)
과거 데이터 주식 차트
부터 10월(10) 2023 으로 10월(10) 2024