Total GAAP quarterly product and service revenues
increased approximately 50% to $127 million
AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) today reported unaudited
consolidated financial results for the second quarter ended June
30, 2016. Total product and service revenues for the second quarter
of 2016 increased approximately 50% to $127.4 million. This
increase was driven by record sales of Makena and Feraheme and the
addition of Cord Blood Registry® (CBR) to the company’s product
portfolio in August of 2015. The company reported second quarter
2016 operating income of $18.1 million and a net loss of $0.6
million. Non-GAAP adjusted EBITDA for the second quarter of 2016
increased 24% to $64.6 million1 versus the same period in
2015. After deducting cash interest expense from adjusted EBITDA,
the company generated second quarter 2016 non-GAAP net income of
$50.3 million.1
“Strong execution, including the recent successful launch of the
single-dose, preservative-free formulation of Makena and expanded
use of our Makena @Home service, drove 21% sales growth in the
second quarter over the first quarter of 2016,” stated William
Heiden, AMAG’s chief executive officer. “In addition to solid
commercial performance during the quarter, we made further progress
on both our Feraheme and Makena next-generation development
programs.”
1 See summaries of GAAP to non-GAAP adjustments at the
conclusion of this press release.
Makena Next Generation Development
UpdateAMAG has completed pilot pharmacokinetic
(PK) studies and is preparing for the initiation of a definitive PK
study later this year for the Makena subcutaneous auto-injector
device. The company recently met with the U.S. Food and Drug
Administration (FDA) to review its planned supplemental new drug
application (sNDA) filing for this new Makena product. Based on
those discussions, the company has accelerated its plan to conduct
a comparative pain study concurrently with the definitive PK study
so that it can include the pain data in the sNDA submission.
Successfully demonstrating a reduction in pain will allow the
company to apply for seven years of orphan drug exclusivity on the
drug-device combination. Orphan drug exclusivity is based on the
FDA’s assessment of clinical superiority as measured by a
significant improvement in safety or efficacy over the existing
standard of care. This exclusivity, along with the already issued
patents on the auto-injector device and a filed patent application
on the route of administration, would provide multiple layers of
protection. The inclusion of clinical pain data in the sNDA will
likely result in a 10 month regulatory review timeline. The
company’s timeline to file the sNDA in the second quarter of 2017
remains unchanged, with an anticipated FDA approval in the first
quarter of 2018.
“We believe that submitting the pain data with the sNDA filing
is the best strategy to extend and protect the Makena franchise and
secure our leadership position in this market for many years to
come,” said Mr. Heiden.
Second Quarter 2016 and Recent Business
Highlights
- Delivered record net product and service revenues of $127.4
million in the second quarter of 2016, compared with $84.7 million
in the same period last year. This increase of approximately 50%
was driven by record sales of both Makena and Feraheme and the
addition of CBR.
- Achieved record Makena sales of $78.4 million in the second
quarter of 2016, compared with $63.6 million in the same period
last year. This 23% growth in sales was driven exclusively by an
increase in volume. This growth resulted in Makena market share of
37%, four percentage points over the first quarter of 2016.
- Generated a record $24.3 million of Feraheme sales in the
second quarter of 2016, or 18% growth over the same period last
year, the majority of which was driven by volume.
- Increased non-GAAP CBR revenue by 5%1 over the first quarter of
2016 due to improved net revenue per new customer. In addition, new
customer volume has stabilized on a sequential quarter basis.
- Received approval from the FDA in July 2016 of an additional
source of supply for the single-dose, preservative-free formulation
of Makena.
- Completed pilot PK studies for the Makena subcutaneous
auto-injector and plans to conduct a pain study designed to
establish clinical superiority over the current intramuscular
injection concurrently with the definitive PK study.
- Exceeded forecasted patient enrollment to date in the company’s
head-to-head, Phase 3 clinical trial evaluating Feraheme in adults
with iron deficiency anemia (IDA). This study, which is now
approximately 25% enrolled, is intended to support an sNDA filing
to broaden the use of Feraheme beyond the current chronic kidney
disease (CKD) indication to include all adult IDA patients who have
failed or cannot tolerate oral iron treatment. The company
anticipates filing an sNDA to broaden the Feraheme label in
2017.
- Generated an increase in cash, cash equivalents and investments
of $80.1 million in the first half of 2016 to $546.5 million, net
of $20.0 million utilized to repurchase the company’s common stock
and $8.8 million to repay debt.
Second Quarter Ended June 30, 2016
(unaudited)Financial Results (GAAP Basis)Total
revenues for the second quarter of 2016 were $127.4 million,
compared with $123.9 million in the second quarter of 2015.
Included in last year’s second quarter results was $39.2 million of
collaboration revenue primarily related to the one-time
acceleration of previously deferred revenue from the termination of
the company’s ex-US ferumoxytol marketing partnership agreement.
Net product and service revenues totaled $127.4 million in the
second quarter of 2016, compared with $84.7 million in the same
period last year. This increase is related to record sales of both
Makena and Feraheme and the addition of CBR, which AMAG purchased
in August 2015. Net product sales of Makena increased to $78.4
million in the second quarter of 2016, compared with $63.6 million
in the same period last year. This growth in Makena sales was
driven by a 24% increase in volume, primarily as a result of the
successful launch of the single-dose, preservative-free formulation
and increased enrollments in the company’s Makena @Home program.
Sales of Feraheme and MuGard® totaled $24.6 million in the second
quarter of 2016, compared with $21.1 million in the second quarter
of 2015. Service revenue from CBR, on a GAAP basis, totaled $24.4
million in the second quarter of 2016.
Total costs and expenses, including costs of product sales and
services, totaled $109.3 million for the second quarter of 2016,
compared with $62.8 million for the same period in 2015. The
increase in operating expenses in 2016 was related to: 1) the cost
of services and operating expenses associated with CBR, which the
company acquired in the third quarter of 2015, 2) a $15.7 million
impairment charge of the MuGard intangible asset partially offset
by a $5.6 million reduction in the contingent consideration
liability, both due to the lack of broad reimbursement and
insurance coverage for the product, 3) higher non-cash amortization
of intangible assets from the company’s acquisitions, and 4) higher
research and development (R&D) costs that included initiation
of the company’s Phase 3 clinical trial to broaden the use of
Feraheme to include all adult IDA patients and costs to support the
company’s Makena subcutaneous auto-injector development
program.
Second quarter 2016 operating income totaled $18.1 million,
compared with $61.1 million in the second quarter of last
year. The company reported a net loss of $0.6 million, or ($0.02)
per basic share and diluted share, for the second quarter of 2016,
compared with net income of $33.3 million, or $1.09 per basic share
and $0.82 per diluted share, for the same period in 2015. Both
operating income and net income in the second quarter of 2015
benefitted from $39.2 million of collaboration revenue from a
former ex-US licensing partner, which includes $5.6 million of cash
received.
Balance Sheet HighlightsThe company’s cash, cash equivalents and
investments increased by $80.1 million in the first half of 2016 to
approximately $546.5 million, net of $20.0 million utilized to
repurchase the company’s common stock and $8.8 million to repay
debt. Total debt (principal amount outstanding), including $200
million of convertible debt, was approximately $1.04 billion as of
June 30, 2016.
“We are pleased with our financial performance during the first
half of 2016,” stated Ted Myles, chief financial officer of AMAG.
“With increasing revenue and a disciplined approach to expense
management, our business successfully generated significant EBITDA
and cash flows. This further strengthens our balance sheet giving
us additional capacity to pursue our portfolio expansion
strategy.”
Financial Results (Non-GAAP Basis)1,2Non-GAAP revenues totaled
$132.5 million in the second quarter of 2016, up from $90.3 million
in the second quarter of 2015. Non-GAAP CBR revenue totaled $29.4
million in the second quarter of 2016. The difference between GAAP
and non-GAAP revenue for CBR represents purchase accounting
adjustments related to deferred revenue. Non-GAAP revenue in 2015
excluded certain non-cash revenue related to the termination of the
company’s ex-US ferumoxytol marketing agreement with its former
partner.
Total costs and expenses, including costs of product sales and
services, on a non-GAAP basis totaled $67.8 million in the second
quarter of 2016, compared with total costs and expenses of $38.3
million in the same period in 2015. Non-GAAP adjusted EBITDA for
the second quarter of 2016 was $64.6 million, compared with $52.1
million for the same period in 2015. Included in second quarter
2015 adjusted EBITDA was the $5.6 million cash portion of
collaboration revenue recognized in connection with the termination
of the company’s ex-US ferumoxytol marketing partnership
agreement.
After deducting cash interest expense from adjusted EBITDA, the
company generated second quarter 2016 non-GAAP net income of $50.3
million, or $1.47 per non-GAAP basic share and $1.45 per non-GAAP
diluted share. In the second quarter of 2015, non-GAAP net income
totaled $44.8 million, or $1.46 per non-GAAP basic share and $1.12
per non-GAAP diluted share.
2 See share count reconciliation at the conclusion of this
press release.
2016 Financial Guidance3
| |
|
|
|
|
|
|
$ in millions |
|
2016 GAAP Guidance |
|
2016 Non-GAAP Guidance |
|
| Makena sales |
|
$310 -
$340 |
|
$310 -
$340 |
|
| Feraheme and MuGard sales |
|
$95 -
$105 |
|
$95 -
$105 |
|
| CBR revenue |
|
$98 - $108 |
|
$115 - $125 |
|
| Total revenue |
|
$503 - $553 |
|
$520 - $570 |
|
| |
|
|
|
|
|
| Net income |
|
$0 -
$30 |
|
$195 -
$225 |
|
| Operating income |
|
$93 -
$123 |
|
N/A |
|
| Adjusted EBITDA |
|
N/A |
|
$255 -
$285 |
|
Conference Call and Webcast
Access AMAG Pharmaceuticals, Inc. will host a
conference call and webcast with slides today at 8:00 a.m. ET,
during which management will discuss the company’s financial and
operating results and recent developments. 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 August
9, 2016 through midnight on August 18, 2016. 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 45782895.
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 August 9, 2016 through midnight on September 9, 2016.
Use of Non-GAAP Financial
Measures AMAG has presented certain non-GAAP
financial measures, including non-GAAP revenue, non-GAAP costs and
expenses, non-GAAP adjusted EBITDA (earnings before income taxes,
depreciation and amortization), non-GAAP net income, non-GAAP basic
and diluted net income per share, and non-GAAP weighted average
basic and diluted shares outstanding. These non-GAAP financial
measures exclude certain amounts, revenue, expenses, income or
dilutive shares from the corresponding financial measures
determined in accordance with accounting principles generally
accepted in the U.S. (GAAP). Due to the adjustments made to GAAP
net income (loss) and GAAP net income (loss) per share to calculate
non-GAAP adjusted net income and non-GAAP net income per share, the
non-GAAP measures are higher than GAAP net income (loss) and GAAP
net income (loss) per share.
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, 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. Further, non-GAAP
net income and non-GAAP net income per share should not be
considered measures 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 condensed
consolidated financial statements.
3 See reconciliation of 2016 financial guidance of non-GAAP
adjusted EBITDA and non-GAAP net income at the conclusion of this
press release. Non-GAAP CBR revenue and non-GAAP total revenue
reflect the addition of $17 million related to purchase accounting
adjustments for deferred revenue in connection with the CBR
acquisition.
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.
About Makena® (hydroxyprogesterone caproate
injection)Makena® is a progestin indicated to
reduce the risk of preterm birth in women pregnant with a single
baby who have a history of singleton spontaneous preterm
birth.
The effectiveness of Makena is based on improvement in the
proportion of women who delivered <37 weeks of gestation. There
are no controlled trials demonstrating a direct clinical benefit,
such as improvement in neonatal mortality and morbidity.
Limitation of use: While there are many risk factors for preterm
birth, safety and efficacy of Makena has been demonstrated only in
women with a prior spontaneous singleton preterm birth. It is not
intended for use in women with multiple gestations or other risk
factors for preterm birth.
Makena should not be used in women with any of the following
conditions: blood clots or other blood clotting problems, breast
cancer or other hormone-sensitive cancers, or history of these
conditions; unusual vaginal bleeding not related to the current
pregnancy, yellowing of the skin due to liver problems during
pregnancy, liver problems, including liver tumors, or uncontrolled
high blood pressure.Before patients receive Makena, they should
tell their healthcare provider if they have an allergy to
hydroxyprogesterone caproate, castor oil, or any of the other
ingredients in Makena; diabetes or prediabetes, epilepsy, migraine
headaches, asthma, heart problems, kidney problems, depression, or
high blood pressure.
In one clinical study, certain complications or events
associated with pregnancy occurred more often in women who received
Makena. These included miscarriage (pregnancy loss before 20 weeks
of pregnancy), stillbirth (fetal death occurring during or after
the 20th week of pregnancy), hospital admission for preterm labor,
preeclampsia (high blood pressure and too much protein in the
urine), gestational hypertension (high blood pressure caused by
pregnancy), gestational diabetes, and oligohydramnios (low amniotic
fluid levels).
Makena may cause serious side effects including blood clots,
allergic reactions, depression, and yellowing of the skin and the
whites of the eyes. The most common side effects of Makena include
injection site reactions (pain, swelling, itching, bruising, or a
hard bump), hives, itching, nausea, and diarrhea.For additional
product information, including full prescribing information, please
visit www.makena.com.
About Feraheme® (ferumoxytol)
Feraheme received marketing approval from the FDA on June 30, 2009
for the treatment of IDA in adult CKD patients and was commercially
launched by AMAG in the U.S. shortly thereafter. Ferumoxytol is
protected in the U.S. by six issued patents covering the
composition and dosage form of the product. Each issued patent is
listed in the FDA’s Orange Book, the last of which expires in June
2023.
Fatal and serious hypersensitivity reactions including
anaphylaxis have occurred in patients receiving Feraheme. Initial
symptoms may include hypotension, syncope, unresponsiveness,
cardiac/cardiorespiratory arrest. Feraheme is contraindicated in
patients with a known hypersensitivity to Feraheme or any of its
components, or a history of allergic reaction to any intravenous
iron product.
For additional product information, please see full Prescribing
Information, including Boxed Warning, available at
www.feraheme.com.
About Cord Blood Registry®
(CBR)CBR is the world’s largest private newborn
stem cell company. Founded in 1992, CBR is entrusted by parents
with storing more than 600,000 umbilical cord blood and cord tissue
units. CBR is dedicated to advancing the clinical application of
newborn stem cells by partnering with reputable research
institutions on FDA-regulated clinical trials for conditions that
have no cure today. For more information,
visit www.cordblood.com.
Forward-Looking Statements
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(PSLRA) and other federal securities laws. Any statements contained
herein which do not describe historical facts, including, among
others, expectations for AMAG’s next generation development
programs for Makena, including the FDA review period for the
auto-injector, the anticipated timing to file a sNDA, the
likelihood and timing of an anticipated approval for the
subcutaneous auto-injector, AMAG’s intention to conduct a
comparative pain study, AMAG’s ability to successfully demonstrate
clinical superiority over the intramuscular injection by
demonstrating a reduction in pain and to obtain orphan drug
exclusivity for the drug-device combination and AMAG’s belief that
submission of the pain data in the sNDA is the best strategy to
protect the Makena franchise; expectations for AMAG’s Phase 3
clinical trial for the broader indication for Feraheme, including
the expected timing of an sNDA submission; AMAG’s 2016 financial
guidance, including GAAP and non-GAAP revenues, GAAP operating
income, non-GAAP adjusted EBITDA and GAAP and non-GAAP net income;
AMAG’s belief that the generation of significant EBITDA and cash
flows in the first half of 2016 provides it with additional
capacity to pursue its portfolio expansion strategy; 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, 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 Report on Form 10-Q for
the quarter ended March 31, 2016 and subsequent filings with the
SEC. Any such 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 trademark 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.
– Tables Follow –
| AMAG Pharmaceuticals, Inc. |
| Condensed Consolidated Statements of
Operations |
| (unaudited, amounts in thousands, except for
per share data) |
|
|
|
|
|
Three Months
Ended |
|
Six Months Ended |
|
|
|
|
June 30, |
|
June 30, |
|
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
| Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Makena |
|
$ |
|
78,406 |
|
|
$ |
|
63,574 |
|
|
$ |
|
143,438 |
|
|
$ |
|
119,103 |
|
|
| Feraheme/MuGard |
|
|
|
24,577 |
|
|
|
|
21,078 |
|
|
|
|
49,109 |
|
|
|
|
42,964 |
|
|
| Cord Blood Registry |
|
|
|
24,379 |
|
|
|
— |
|
|
|
|
43,898 |
|
|
|
— |
|
|
| License fee, collaboration and
other revenues |
|
|
|
57 |
|
|
|
|
39,232 |
|
|
|
|
273 |
|
|
|
|
51,322 |
|
|
| Total revenues |
|
|
|
127,419 |
|
|
|
|
123,884 |
|
|
|
|
236,718 |
|
|
|
|
213,389 |
|
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of product sales |
|
|
|
21,937 |
|
|
|
|
19,679 |
|
|
|
|
40,236 |
|
|
|
|
40,705 |
|
|
| Cost of services |
|
|
|
5,195 |
|
|
|
— |
|
|
|
|
10,721 |
|
|
|
— |
|
|
| Research and development
expenses |
|
|
|
14,234 |
|
|
|
|
8,184 |
|
|
|
|
28,463 |
|
|
|
|
15,172 |
|
|
| Selling, general and administrative
expenses |
|
|
|
51,924 |
|
|
|
|
31,801 |
|
|
|
|
115,098 |
|
|
|
|
63,913 |
|
|
| Impairment charges of intangible
assets |
|
|
|
15,963 |
|
|
|
— |
|
|
|
|
15,963 |
|
|
|
— |
|
|
| Acquisition-related costs |
|
|
— |
|
|
|
|
2,653 |
|
|
|
— |
|
|
|
|
2,653 |
|
|
| Restructuring expenses |
|
|
|
89 |
|
|
|
|
443 |
|
|
|
|
712 |
|
|
|
|
1,014 |
|
|
| Total costs and expenses |
|
|
|
109,342 |
|
|
|
|
62,760 |
|
|
|
|
211,193 |
|
|
|
|
123,457 |
|
|
| Operating income |
|
|
|
18,077 |
|
|
|
|
61,124 |
|
|
|
|
25,525 |
|
|
|
|
89,932 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income
(expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
|
(18,250 |
) |
|
|
|
(10,205 |
) |
|
|
|
(36,693 |
) |
|
|
|
(20,572 |
) |
|
| Interest and dividend income |
|
|
|
773 |
|
|
|
|
372 |
|
|
|
|
1,481 |
|
|
|
|
443 |
|
|
| Other income (expense) |
|
|
— |
|
|
|
2 |
|
|
|
|
220 |
|
|
|
|
2 |
|
|
| Total other income (expense) |
|
|
|
(17,477 |
) |
|
|
|
(9,831 |
) |
|
|
|
(34,992 |
) |
|
|
|
(20,127 |
) |
|
| Income (loss) before
income taxes |
|
|
|
600 |
|
|
|
|
51,293 |
|
|
|
|
(9,467 |
) |
|
|
|
69,805 |
|
|
| Income tax expense
(benefit) |
|
|
|
1,196 |
|
|
|
|
18,035 |
|
|
|
|
(1,344 |
) |
|
|
|
23,643 |
|
|
| Net income (loss) |
|
$ |
|
(596 |
) |
|
$ |
|
33,258 |
|
|
$ |
|
(8,123 |
) |
|
$ |
|
46,162 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) per
share |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
|
(0.02 |
) |
|
$ |
|
1.09 |
|
|
$ |
|
(0.24 |
) |
|
$ |
|
1.60 |
|
|
| Diluted |
|
$ |
|
(0.02 |
) |
|
$ |
|
0.82 |
|
|
$ |
|
(0.24 |
) |
|
$ |
|
1.23 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares
outstanding used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
|
34,223 |
|
|
|
|
30,636 |
|
|
|
|
34,481 |
|
|
|
|
28,934 |
|
|
| Diluted |
|
|
|
34,223 |
|
|
|
|
43,181 |
|
|
|
|
34,481 |
|
|
|
|
40,791 |
|
|
| AMAG Pharmaceuticals, Inc. |
| Condensed Consolidated Balance
Sheets |
| (unaudited, amounts in thousands) |
| |
| |
|
|
|
June 30, 2016 |
|
December 31,
2015 |
|
| Assets: |
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
251,110 |
|
$ |
228,705 |
|
| Investments |
|
|
295,359 |
|
|
237,626 |
|
| Accounts receivable, net |
|
|
66,086 |
|
|
85,678 |
|
| Inventories |
|
|
39,564 |
|
|
40,645 |
|
| Receivable from collaboration |
|
|
— |
|
|
428 |
|
| Prepaid and other current
assets |
|
|
13,437 |
|
|
13,592 |
|
| Total current assets |
|
|
665,556 |
|
|
606,674 |
|
| Property, plant and
equipment, net |
|
|
27,173 |
|
|
28,725 |
|
| Goodwill |
|
|
639,484 |
|
|
639,188 |
|
| Intangible assets,
net |
|
|
1,144,858 |
|
|
1,196,771 |
|
| Restricted cash |
|
|
2,593 |
|
|
2,593 |
|
| Other long-term
assets |
|
|
1,146 |
|
|
2,259 |
|
| Total assets |
|
$ |
2,480,810 |
|
$ |
2,476,210 |
|
| |
|
|
|
|
|
|
|
| Liabilities and
stockholders’ equity: |
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
8,653 |
|
$ |
4,906 |
|
| Accrued expenses |
|
|
107,599 |
|
|
106,363 |
|
| Current portion of long-term
debt |
|
|
49,610 |
|
|
17,500 |
|
| Current portion of
acquisition-related contingent consideration |
|
|
98,703 |
|
|
96,967 |
|
| Deferred revenues |
|
|
32,499 |
|
|
20,185 |
|
| Total current liabilities |
|
|
297,064 |
|
|
245,921 |
|
| Long-term
liabilities: |
|
|
|
|
|
|
|
| Long-term debt, net |
|
|
764,543 |
|
|
803,669 |
|
| Convertible 2.5% notes, net |
|
|
174,953 |
|
|
170,749 |
|
| Acquisition-related contingent
consideration |
|
|
125,106 |
|
|
125,592 |
|
| Deferred tax liabilities |
|
|
188,852 |
|
|
189,145 |
|
| Deferred revenues |
|
|
9,983 |
|
|
5,093 |
|
| Other long-term liabilities |
|
|
4,142 |
|
|
3,777 |
|
| Total liabilities |
|
|
1,564,643 |
|
|
1,543,946 |
|
| Total stockholders’
equity |
|
|
916,167 |
|
|
932,264 |
|
| Total liabilities and stockholders’
equity |
|
$ |
2,480,810 |
|
$ |
2,476,210 |
|
| AMAG Pharmaceuticals, Inc. |
| Reconciliation of Non-GAAP Adjustments to Net
Income |
| (unaudited, amounts in
thousands) |
|
|
|
|
Three Months
Ended |
|
Six Months Ended |
|
| |
June 30, 2016 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
|
| GAAP revenues |
$ |
|
127,419 |
|
|
$ |
|
123,884 |
|
|
$ |
|
236,718 |
|
|
$ |
|
213,389 |
|
|
| Service revenues |
|
|
5,053 |
|
4 |
|
— |
|
|
|
|
13,614 |
|
4 |
|
— |
|
|
| License fee, collaboration and
other revenues |
|
— |
|
|
|
|
(33,563 |
) |
5 |
|
— |
|
|
|
|
(39,965 |
) |
5 |
| Non-GAAP revenues |
|
|
132,472 |
|
|
|
|
90,321 |
|
|
|
|
250,332 |
|
|
|
|
173,424 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP CBR revenues |
|
|
24,379 |
|
|
|
— |
|
|
|
43,898 |
|
|
|
— |
|
| Service revenues |
|
|
5,053 |
|
4 |
|
— |
|
|
|
13,614 |
|
4 |
|
— |
|
| Non-GAAP CBR
revenues |
|
|
29,432 |
|
|
|
— |
|
|
|
57,512 |
|
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP costs of product
sales and services |
|
|
27,132 |
|
|
|
|
19,679 |
|
|
|
|
50,957 |
|
|
|
|
40,705 |
|
|
| Cost of product
sales |
|
|
(17,627 |
) |
6 |
|
|
(16,521 |
) |
6 |
|
|
(32,236 |
) |
6 |
|
|
(34,261 |
) |
6 |
| Cost of services |
|
|
(353 |
) |
7 |
|
— |
|
|
|
(713 |
) |
7 |
|
— |
|
| Non-GAAP costs of
product sales and services |
|
|
9,152 |
|
|
|
|
3,158 |
|
|
|
|
18,008 |
|
|
|
|
6,444 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP costs and
expenses |
|
|
109,342 |
|
|
|
|
62,760 |
|
|
|
|
211,193 |
|
|
|
|
123,457 |
|
|
| Cost of product sales |
|
|
(17,627 |
) |
6 |
|
|
(16,521 |
) |
6 |
|
|
(32,236 |
) |
6 |
|
|
(34,261 |
) |
6 |
| Cost of services |
|
|
(353 |
) |
7 |
|
— |
|
|
|
(713 |
) |
7 |
|
— |
|
| Research and development |
|
|
(1,867 |
) |
8 |
|
|
(1,197 |
) |
8 |
|
|
(2,641 |
) |
8 |
|
|
(1,691 |
) |
8 |
| Selling, general and
administrative |
|
|
(5,605 |
) |
9 |
|
|
(3,679 |
) |
9 |
|
|
(20,725 |
) |
9 |
|
|
(9,865 |
) |
9 |
| Impairment charges of intangible
assets |
|
|
(15,963 |
) |
10 |
|
— |
|
|
|
(15,963 |
) |
10 |
|
— |
|
| Acquisition-related |
|
— |
|
|
|
(2,653 |
) |
11 |
|
— |
|
|
|
(2,653 |
) |
11 |
| Restructuring |
|
|
(89 |
) |
12 |
|
|
(443 |
) |
12 |
|
|
(712 |
) |
12 |
|
|
(1,014 |
) |
12 |
| Non-GAAP costs and
expenses |
|
|
67,838 |
|
|
|
|
38,267 |
|
|
|
|
138,203 |
|
|
|
|
73,973 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP other income
(expense) |
|
|
(17,477 |
) |
|
|
|
(9,831 |
) |
|
|
|
(34,992 |
) |
|
|
|
(20,127 |
) |
|
| Non-cash interest expense |
|
|
3,104 |
|
13 |
|
|
2,944 |
|
13 |
|
|
6,162 |
|
13 |
|
|
5,830 |
|
13 |
| Income tax expense (benefit) |
|
|
1,196 |
|
14 |
|
|
17,655 |
|
14 |
|
|
(1,344 |
) |
14 |
|
|
23,025 |
|
14 |
| Non-GAAP other income
(expense) |
|
|
(13,177 |
) |
|
|
|
10,768 |
|
|
|
|
(30,174 |
) |
|
|
|
8,728 |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income
(loss) |
|
|
(596 |
) |
|
|
|
33,258 |
|
|
|
|
(8,123 |
) |
|
|
|
46,162 |
|
|
| Total adjustments |
|
|
50,857 |
|
|
|
|
11,529 |
|
|
|
|
91,422 |
|
|
|
|
38,374 |
|
|
| Non-GAAP net income
(loss) |
|
|
50,261 |
|
|
|
|
44,787 |
|
|
|
|
83,299 |
|
|
|
|
84,536 |
|
|
4 Represents purchase accounting adjustments related to deferred
revenue in connection with the CBR acquisition.5 Represents
adjustments to exclude certain non-cash revenue associated with the
2014 termination of the company’s ex-US ferumoxytol marketing
agreement.6 Adjustments to eliminate the following: (i) non-cash
step-up of inventory from purchase accounting; (ii) amortization
expense related to intangible assets; (iii) depreciation expense;
and (iv) stock-based compensation expense.7 Adjustments to
eliminate depreciation expense.8 Adjustments to eliminate the
following: (i) non-cash step-up of inventory used in research and
development from purchase accounting; (ii) depreciation expense;
and (iii) stock-based compensation expense.9 Adjustments to
eliminate the following: (i) non-cash adjustments related to
contingent consideration; (ii) amortization expense related to
intangible assets; (iii) depreciation expense; and (iv) stock-based
compensation expense.10 Impairment expense of $15.7 million related
to the MuGard Intangible Asset and $0.2 million related to the
favorable lease intangible asset11 Adjustments to eliminate
one-time costs related to Cord Blood Registry acquisition.12
Adjustments to eliminate non-recurring restructuring costs. 13
Adjustments to eliminate non-cash interest expense.14 Adjustments
to eliminate non-cash income tax expense (benefit).
| AMAG Pharmaceuticals, Inc. |
| Reconciliation of GAAP Net Income (Loss) to
Non-GAAP Net Income to Non-GAAP Adjusted EPS |
| (unaudited, amounts in thousands, except
per share data) |
|
|
|
|
Three Months
Ended |
|
Six Months Ended |
| |
June 30, 2016 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
| GAAP
Net Income (Loss) |
$ |
|
(596 |
) |
|
$ |
|
33,258 |
|
|
$ |
|
(8,123 |
) |
|
$ |
|
46,162 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| Interest expense |
|
|
17,477 |
|
|
|
|
9,831 |
|
|
|
|
34,993 |
|
|
|
|
20,127 |
|
| Provision for income tax |
|
|
1,196 |
|
|
|
|
18,035 |
|
|
|
|
(1,344 |
) |
|
|
|
23,643 |
|
| Operating
income |
|
|
18,077 |
|
|
|
|
61,124 |
|
|
|
|
25,526 |
|
|
|
|
89,932 |
|
| Purchase accounting adjustments
related to CBR deferred revenue |
|
|
5,053 |
|
|
|
— |
|
|
|
13,614 |
|
|
|
— |
| Non-cash collaboration revenue |
|
— |
|
|
|
(33,563 |
) |
|
|
— |
|
|
|
(39,965 |
) |
| Depreciation and intangible asset
amortization |
|
|
21,587 |
|
|
|
|
13,549 |
|
|
|
|
40,431 |
|
|
|
|
25,164 |
|
| Non-cash inventory step-up
adjustments |
|
|
2,344 |
|
|
|
|
3,643 |
|
|
|
|
3,144 |
|
|
|
|
9,826 |
|
| Stock-based compensation |
|
|
5,178 |
|
|
|
|
4,015 |
|
|
|
|
11,341 |
|
|
|
|
6,684 |
|
| Adjustments to contingent
consideration |
|
|
(3,657 |
) |
|
|
|
(960 |
) |
|
|
|
1,399 |
|
|
|
|
1,639 |
|
| Impairment charges of intangible
assets |
|
|
15,963 |
|
|
|
— |
|
|
|
15,963 |
|
|
|
— |
| Acquisition-related costs |
|
— |
|
|
|
2,834 |
|
|
|
— |
|
|
|
2,834 |
|
| Restructuring costs |
|
|
89 |
|
|
|
|
1,412 |
|
|
|
|
712 |
|
|
|
|
3,337 |
|
|
Non-GAAP adjusted EBITDA |
|
|
64,634 |
|
|
|
|
52,054 |
|
|
|
|
112,130 |
|
|
|
|
99,451 |
|
| Cash interest |
|
|
(14,373 |
) |
|
|
|
(6,887 |
) |
|
|
|
(28,831 |
) |
|
|
|
(14,297 |
) |
| Cash taxes |
|
— |
|
|
|
(380 |
) |
|
|
— |
|
|
|
(618 |
) |
|
Non-GAAP Net Income |
$ |
|
50,261 |
|
|
$ |
|
44,787 |
|
|
$ |
|
83,299 |
|
|
$ |
|
84,536 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income (loss) per share -
Basic |
$ |
|
(0.02 |
) |
|
$ |
|
1.09 |
|
|
$ |
|
(0.24 |
) |
|
$ |
|
1.60 |
|
| Shares used in GAAP per share
computation |
|
|
34,223 |
|
|
|
|
30,636 |
|
|
|
|
34,481 |
|
|
|
|
28,934 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP net income per share -
Basic |
$ |
|
1.47 |
|
|
$ |
|
1.46 |
|
|
$ |
|
2.42 |
|
|
$ |
|
2.92 |
|
| Shares used in non-GAAP per share
computation |
|
|
34,223 |
|
|
|
|
30,636 |
|
|
|
|
34,481 |
|
|
|
|
28,934 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
| GAAP net income (loss) per share -
Diluted |
$ |
|
(0.02 |
) |
|
$ |
|
0.82 |
|
|
$ |
|
(0.24 |
) |
|
$ |
|
1.23 |
|
| Shares used in GAAP per share
computation |
|
|
34,223 |
|
|
|
|
43,181 |
|
|
|
|
34,481 |
|
|
|
|
40,791 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Non-GAAP net income per share -
Diluted |
$ |
|
1.45 |
|
|
$ |
|
1.12 |
|
|
$ |
|
2.39 |
|
|
$ |
|
2.27 |
|
| Shares used in non-GAAP per share
computation |
|
|
34,607 |
|
|
|
|
40,002 |
|
|
|
|
34,839 |
|
|
|
|
37,182 |
|
| AMAG Pharmaceuticals, Inc. |
| Reconciliation of 2016 Financial Guidance of
Non-GAAP Adjusted EBITDA and Non-GAAP Net Income |
| (unaudited, amounts in millions) |
| |
|
|
|
|
2016 |
|
|
|
|
Financial |
|
|
|
Guidance |
| GAAP
Net Income |
|
$0 - $30 |
|
| Adjustments: |
|
|
| Interest expense |
|
|
73 |
|
| Provision for income tax |
|
|
20 |
|
| Operating
income |
|
$93 - $123 |
|
| Purchase accounting adjustments
related to CBR deferred revenue |
|
|
17 |
|
| Depreciation and intangible asset
amortization |
|
|
91 |
|
| Non-cash inventory step-up
adjustments |
|
|
5 |
|
| Stock-based compensation |
|
|
26 |
|
| Adjustments to contingent
consideration |
|
|
6 |
|
| Impairment charges of intangible
assets |
|
|
16 |
|
| Restructuring costs |
|
|
1 |
|
| Non-GAAP adjusted
EBITDA |
|
$255 - $285 |
|
| Cash interest |
|
|
(60 |
) |
| Non-GAAP Net
Income |
|
$195 - $225 |
|
| AMAG Pharmaceuticals, Inc. |
| Share Count Reconciliation |
| (unaudited, amounts in millions) |
|
|
|
|
|
Three Months
Ended |
|
Six Months Ended |
|
|
|
|
June 30, 2016 |
|
June 30, 2015 |
|
June 30, 2016 |
|
June 30, 2015 |
|
|
Weighted average basic shares
outstanding |
|
34.2 |
|
|
30.6 |
|
|
34.5 |
|
|
28.9 |
|
|
| Employee equity incentive
awards |
|
— |
15 |
|
1.8 |
|
|
— |
15 |
|
1.6 |
|
|
| Convertible notes |
|
— |
15 |
|
7.4 |
|
|
— |
15 |
|
7.4 |
|
|
| Warrants |
|
— |
15 |
|
3.4 |
|
|
— |
15 |
|
2.9 |
|
|
| GAAP
diluted shares outstanding |
|
34.2 |
|
|
43.2 |
|
|
34.5 |
|
|
40.8 |
|
|
| Employee equity incentive
awards |
|
0.4 |
16 |
— |
|
0.3 |
16 |
— |
|
| Effect of bond hedge and
warrants |
|
— |
|
|
(3.2 |
) |
17 |
— |
|
|
(3.6 |
) |
17 |
|
Non-GAAP diluted shares
outstanding |
|
34.6 |
|
|
40.0 |
|
|
34.8 |
|
|
37.2 |
|
|
15 Employee equity incentive awards, Convertible notes and
Warrants would be anti-dilutive in this period utilizing the
“if-converted” method, which adjusts net income for the after-tax
interest expense applicable to the convertible
notes.16 Reflects the Non-GAAP dilutive impact of the employee
equity incentive awards.17 Reflects the impact of the non-GAAP
benefit of the bond hedge and warrants.
CONTACT:
AMAG Pharmaceuticals, Inc.
Linda Lennox
Vice President, Investor Relations
617-498-2846
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