2016 total revenue increased 45 percent
AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) today provided a business
update, including announcing preliminary unaudited fourth quarter
and annual 2016 financial results, 2017 financial guidance, and an
update on its Makena® subcutaneous auto-injector program. In a
separate release, the company also announced a licensing
transaction for RekyndaTM (bremelanotide). The company will present
further details at the 35th Annual J.P. Morgan Healthcare
Conference in San Francisco on Tuesday, January 10, 2017 at 11:30
a.m. PT (2:30 p.m. ET). A live audio webcast of the presentation
and the following breakout session will be accessible through the
Investors section of the AMAG website at www.amagpharma.com.
“AMAG achieved record growth in 2016, driven by an experienced
commercial team that consistently delivers strong results and will
serve us well for the long term as our portfolio expands,” said
William Heiden, chief executive officer of AMAG. “Record revenues
of over half a billion dollars were driven by sales increases
across all of our marketed products, positioning us well for
further growth in 2017.”
“In addition to meeting or exceeding the revenue growth targets
we have set for 2017, other key priorities include filing
supplemental new drug applications for the Makena subcutaneous
auto-injector and the Feraheme label expansion, as well as the
acquisition or licensing of additional products to drive further
shareholder value. We are also pleased to announce the licensing of
Rekynda, a potential treatment for a significant unmet medical need
in women’s health,” Mr. Heiden added.
Preliminary Fourth Quarter and Full Year 2016 Financial
Results (unaudited)Fourth Quarter
2016AMAG expects total GAAP revenue to be between $149
million and $154 million for the fourth quarter of 2016, which
includes Makena net product sales of between $96 million and $99
million, Feraheme and MuGard net product sales of between $25
million and $27 million, and CBR service revenue of approximately
$28 million.
AMAG expects fourth quarter 2016 total non-GAAP revenue to be
between $150 million and $155 million, which reflects a $1.4
million purchase accounting adjustment related to CBR deferred
revenue.
The weighted average basic and diluted shares outstanding for
the fourth quarter of 2016 totaled 34.3 million
and 35.1 million, respectively. Non-GAAP diluted shares
for fourth quarter of 2016 totaled 35.1 million.1
Full Year 2016AMAG expects 2016 total GAAP
revenue to be between $529 million and $534 million, which includes
Makena net product sales of between $333 million and $336 million,
Feraheme and MuGard net product sales of between $96 million and
$98 million, and CBR service revenue of approximately $100
million.
AMAG expects 2016 non-GAAP revenue to be between $546 million
and $551 million, which reflects a $17 million purchase accounting
adjustment related to CBR deferred revenue.
The company ended 2016 with approximately $579 million in cash,
cash equivalents and investments and total debt (principal amount
outstanding) of $1.0 billion. The company will report complete
financial results for the fourth quarter and full year of 2016 in
February 2017.
Makena Subcutaneous Auto-Injector Development Program
UpdateAMAG’s successful Makena intramuscular (IM)
injection product has orphan drug exclusivity through February
2018. The company continues to work on improving the Makena product
with next-generation alternatives. In October 2016, the company
initiated a definitive pharmacokinetic (PK) study to demonstrate
comparable bioavailability of a subcutaneous (SC) auto-injector
product and the current IM injection form of Makena. This open
label, parallel trial enrolled 120 healthy post-menopausal women in
a 1:1 randomization. Data collection and analysis are still
underway, with final results expected by the end of the first
quarter of 2017.
Assuming the PK data, once fully collected and analyzed, shows
comparable bioavailability between the SC and IM injections, the
company intends to file a supplemental new drug application (sNDA)
for the SC auto-injector in the second quarter of 2017. Preliminary
data from the PK study show a higher reporting rate in the SC arm
(~25 percent of subjects vs. <5 percent of subjects in the IM
arm) of a transient burning/stinging sensation associated with the
injection. Similar observations were also reported in the SC arm of
the company's open label, parallel comparative pain study (also
initiated in October 2016), which the company recently elected to
discontinue. The company does not plan to request orphan
exclusivity as part of the sNDA filing and, therefore, anticipates
a six-month FDA review timeline. However, there are multiple device
and drug-device combination patents and patent applications
in-licensed from Antares which relate to the subcutaneous
auto-injector. The company intends to request Orange Book listing
of eligible Antares drug-device patents. “We believe that the
subcutaneous auto-injector offers the potential for greater
convenience for healthcare providers and an alternative
administration method to the intramuscular injection for patients,”
stated Julie Krop, MD, chief medical officer of AMAG. “As part of
our broader next-generation program, we are also exploring
alternative injection sites and SC formulations to further improve
the value of this product for the patients and providers we
serve.”
2017 Financial Guidance2The company expects to
achieve the following financial results in 2017:
$ in millions |
2017 GAAP Guidance |
2017 Non-GAAP Guidance |
Makena |
$410 - $440 |
$410 - $440 |
Feraheme and MuGard |
$100 - $110 |
$100 - $110 |
CBR |
$110 - $120 |
$115 - $125 |
Total revenue |
$620 - $670 |
$625 - $675 |
|
Includes Rekynda (bremelanotide) |
|
|
Net income3 |
$19 - $60 |
N/A |
Operating income3 |
$103 - $173 |
N/A |
Adjusted EBITDA |
N/A |
$270 - $340 |
“After a strong performance in 2016, we are forecasting
approximately 20 percent top-line growth in 2017,” stated Ted
Myles, chief financial officer of AMAG. “We are also projecting
double-digit adjusted EBITDA growth in 2017, including the
additional investments to complete the development of Rekynda.
Furthermore, in 2016 we added over $100 million of cash to our
balance sheet, which will support additional acquisition or
licensing transactions.”
Use of Non-GAAP Financial Measures AMAG
has presented certain non-GAAP financial measures, including
non-GAAP revenues and non-GAAP adjusted EBITDA (earnings before
income taxes, depreciation and amortization). These non-GAAP
financial measures exclude certain amounts, revenue, or income from
the corresponding financial measures determined in accordance with
accounting principles generally accepted in the U.S. (GAAP).
Management believes this non-GAAP information is useful for
investors, taken in conjunction with AMAG’s GAAP financial
statements, because it provides greater transparency regarding
AMAG’s operating performance and prospects for future performance
and allows investors to better compare performance over different
periods. Management uses these measures, among other factors, to
assess and analyze operational results and trends and to make
financial and operational decisions, including in compensation
decisions. Non-GAAP information is not prepared under a
comprehensive set of accounting rules and should only be used to
supplement an understanding of AMAG’s operating results as reported
under GAAP, not as a substitute for GAAP financial measures, and
AMAG encourages investors to review its consolidated financial
statements and publicly filed reports in their entirety. In
addition, these non-GAAP financial measures are unlikely to be
comparable with non-GAAP information provided by other companies.
Due to the adjustments made to GAAP net income to calculate
non-GAAP net income, the non-GAAP measures are higher than GAAP net
income. Non-GAAP net income should not be considered a measure of
our liquidity. The determination of the amounts that are excluded
from non-GAAP financial measures is a matter of management judgment
and depends upon, among other factors, the nature of the underlying
expense or income amounts. Reconciliations between these non-GAAP
financial measures and the most comparable GAAP financial measures
are included in the tables accompanying this press release after
the unaudited consolidated financial statements.
About AMAGAMAG is a biopharmaceutical company
focused on developing and delivering important therapeutics,
conducting clinical research in areas of unmet need and creating
education and support programs for the patients and families we
serve. Our products support the health of patients in the areas of
maternal health, anemia management and cancer supportive care.
Through CBR®, we also help families to preserve newborn stem cells,
which are used today in transplant medicine for certain cancers and
blood, immune and metabolic disorders, and have the potential to
play a valuable role in the ongoing development of regenerative
medicine. For additional company information, please
visit www.amagpharma.com.
Forward-Looking StatementsThis press release
contains forward-looking information about AMAG Pharmaceuticals,
Inc. within the meaning of the Private Securities Litigation Reform
Act of 1995 and other federal securities laws. Any statements
contained herein which do not describe historical facts, including,
among others, statements regarding expected 2016 preliminary fourth
quarter and full year financial results, including revenues and
year end cash, cash equivalents and investments balances and total
debt; AMAG’s beliefs that its commercial team will serve AMAG well
for the long-term and that its record revenues in 2016 position it
well for future growth in 2017; AMAG’s 2017 key priorities,
including product development, label expansion and portfolio
expansion objectives; expectations regarding the Makena
subcutaneous auto-injector program, including the timing of
final data results for the PK study, AMAG’s intention to file
a sNDA in the second quarter of 2017, its belief that it will not
request orphan exclusivity, the FDA’s anticipated review time and
its belief that the subcutaneous auto-injector offers potential for
more convenient and alternative administration; AMAG’s intention to
request Orange Book listing of Antares’ eligible drug-device
patent; AMAG’s 2017 financial outlook, including revenue, adjusted
EBITDA and net income; expectations regarding top-line and adjusted
EBITDA growth in 2017; expectations regarding exploring alternative
injection sites and subcutaneous formulations to further improve
the value of Makena; and beliefs that newborn stem cells have the
potential to play a valuable role in the development of
regenerative medicine are forward-looking statements which involve
risks and uncertainties that could cause actual results to differ
materially from those discussed in such forward-looking
statements.
Such risks and uncertainties include, among others, (1) the
possibility that the closing conditions set forth in the Rekynda
license agreement, including any required filings under Rule 3-05
of Regulation S-X, will not be met and that the parties will
be unable to consummate the proposed transactions, (2)
uncertainties regarding AMAG’s and Palatin’s ability to
successfully and timely complete clinical development programs and
obtain regulatory approval for Rekynda in North America, (3) the
possibility that significant safety or drug interaction problems
could arise with respect to Rekynda, (4) uncertainties regarding
the manufacture of Rekynda, (5) the ability of AMAG to raise
awareness and understanding of HSDD and the potential benefits of
Rekynda, (6) uncertainties relating to our and Palatin’s patents
and proprietary rights associated with Rekynda in North America,
(7) that the cost of the Rekynda transaction to AMAG will be more
than planned and/or will not provide the intended positive
financial results, (8) that AMAG or Palatin will fail to fully
perform under the Rekynda license agreement, (9) uncertainty
regarding our ability to compete in the FSD market in North
America, and (10) those risks identified in AMAG’s filings
with the U.S. Securities and Exchange Commission (SEC), including
its Annual Report on Form 10-K for the year ended December 31,
2015, its Quarterly Reports on Form 10-Q for the quarters ended
March 31, 2016, June 30, 2016 and September 30, 2016 and subsequent
filings with the SEC. Any of these risks and uncertainties could
materially and adversely affect AMAG’s results of operations, its
profitability and its cash flows, which would, in turn, have a
significant and adverse impact on AMAG’s stock price. AMAG cautions
you not to place undue reliance on any forward-looking statements,
which speak only as of the date they are made.
AMAG disclaims any obligation to publicly update or revise any
such statements to reflect any change in expectations or in events,
conditions or circumstances on which any such statements may be
based, or that may affect the likelihood that actual results will
differ from those set forth in the forward-looking statements.
AMAG Pharmaceuticals® and Feraheme® are registered
trademarks of AMAG Pharmaceuticals, Inc. MuGard® is a
registered trademark of Abeona Therapeutics, Inc.
Makena® is a registered trademark of AMAG Pharmaceuticals IP,
Ltd. Cord Blood Registry® and CBR® are registered
trademarks of CBR Systems, Inc. RekyndaTM is a trademark
of Palatin Technologies, Inc.
1 See share count reconciliation at the conclusion of this
press release.
2 See GAAP to non-GAAP reconciliation for 2017 financial
guidance at the conclusion of this press release.
3 2017 GAAP financial guidance excludes potential
accounting impact of Palatin Technologies license transaction.
- Tables Follow –
AMAG
Pharmaceuticals, Inc.Reconciliation of 2017
Financial Guidance of Non-GAAP Adjusted EBITDA
(unaudited, amounts in millions) |
|
|
GAAP Net
Income |
|
$19 - 60 |
|
Adjustments: |
|
|
Interest
expense, net |
|
71 |
|
Provision
for income tax |
|
13 - 42 |
|
Operating income |
|
$103 - $173 |
|
Purchase
accounting adjustments related to CBR deferred revenue |
|
6 |
|
Depreciation and intangible asset amortization |
|
127 |
|
Non-cash
inventory step-up adjustments |
|
2 |
|
Stock-based compensation |
|
27 |
|
Adjustments to contingent consideration |
|
5 |
|
Non-GAAP
adjusted EBITDA |
|
$270 - $340 |
|
AMAG Pharmaceuticals,
Inc.Share Count
Reconciliation(amounts in millions) |
|
|
|
|
Three Months Ended December 31, 2016 |
Weighted
average basic shares outstanding |
|
|
|
34.3 |
Employee equity
incentive awards |
|
|
|
0.8 |
Convertible
notes |
|
|
|
-- |
Warrants |
|
|
|
-- |
GAAP diluted
shares outstanding |
|
|
|
35.1 |
Convertible
notes |
|
|
|
-- |
Effect of bond
hedge adjustment |
|
|
|
-- |
Non-GAAP
diluted shares outstanding |
|
|
|
35.1 |
CONTACTS:
Investors:
Linda Lennox
Vice President, Investor Relations
908-627-3434
Media:
Katie Payne
Vice President, External Affairs
617-498-3303
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