Total GAAP quarterly revenue increased 50%
to $143.8 million, driven by record sales of Makena®
AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) today reported unaudited
consolidated financial results for the third quarter ended
September 30, 2016. Total revenue for the third quarter of
2016 increased approximately 50% to $143.8 million. This increase
was driven by record sales of Makena and the recognition of a full
quarter of revenue from Cord Blood Registry® (CBR), which was
acquired by AMAG on August 17, 2015. The company reported third
quarter 2016 operating income of $38.8 million and net income of
$16.2 million. Non-GAAP adjusted EBITDA for the third quarter of
2016 increased to $76.2 million1, or 44%, versus the same period in
2015. Non-GAAP net income for the third quarter of 2016 increased
to $61.8 million1, or 46%, versus the same period in 2015.
"We executed well against our key priorities in the third
quarter, delivering strong financial results and hitting key
milestones in our next-generation development programs," stated
William Heiden, AMAG's chief executive officer. "Our Makena
subcutaneous auto-injector program is on-track for an sNDA filing
in the second quarter of next year and the Feraheme sNDA submission
seeking approval of a broader label has been accelerated to
mid-year 2017."
"We have updated the company's financial guidance based on our
fourth quarter expectations of continued strong top and bottom line
performance, building on our successes achieved in the third
quarter,” Mr. Heiden continued.
Third Quarter 2016 and Recent Business
Highlights
- Delivered total revenue of $143.8 million in the third quarter
of 2016, compared with $96.2 million in the same period last year.
This increase of approximately 50% was driven by record sales of
Makena and the recognition of a full quarter of revenue from
CBR.
- Achieved Makena sales of $93.4 million in the third quarter of
2016, compared with $65.2 million in the same period last year.
Makena's robust sales growth of 43% was driven exclusively by an
increase in volume. This growth resulted in Makena market share of
41%, four percentage points over the second quarter of 2016 and an
11 percentage point gain year-to-date.
- Generated 1.8% growth to $29.9 million1 in non-GAAP revenue
from CBR over the second quarter of 2016 due to improved net
revenue per new customer. In addition, enrollments were higher
versus the second quarter of 2016.
- Reported $22.3 million in Feraheme sales, maintaining market
share in the intravenous iron market, which experienced a slight
decline in the third quarter of 2016.
- Achieved key milestones in the Makena subcutaneous
auto-injector development program. The company dosed first subjects
in both the definitive pharmacokinetic study and comparative pain
study. Data from each of these studies is intended to support the
supplemental new drug application (sNDA) that the company plans to
file with the Food and Drug Administration (FDA) in the second
quarter of 2017.
- Continued to enroll patients more rapidly than expected in the
company’s head-to-head, Phase 3 clinical trial evaluating Feraheme
in adults with iron deficiency anemia (IDA). The company is seeking
to broaden Feraheme’s current label beyond its chronic kidney
disease (CKD) indication to include all adult IDA patients who have
failed or cannot tolerate oral iron treatment. The timeline to
anticipated approval has been shortened by approximately six months
as a result of the trial’s rapid enrollment, which has accelerated
the company's expected sNDA submission date to mid-2017.
- Generated an increase of $147.8 million in cash and investments
in the first nine months of 2016 to $614.1 million, net of $20.0
million utilized to repurchase the company’s common stock and $13.1
million to repay debt.
Third Quarter Ended September 30, 2016
(unaudited)
Financial Results (GAAP Basis)Total revenues for the third
quarter of 2016 were $143.8 million, compared with $96.2 million in
the third quarter of 2015. This increase is related to record sales
of Makena and the recognition of a full quarter of revenue from
CBR, which was acquired by AMAG on August 17, 2015. Net product
sales of Makena increased to $93.4 million in the third quarter of
2016, compared with $65.2 million in the same period last year.
This 43% growth in Makena sales was primarily driven by the
successful launch of the single-dose, preservative-free formulation
and strong growth in the company’s Makena @Home program. Sales of
Feraheme and MuGard® totaled $22.4 million in the third quarter of
2016, compared with $23.8 million in the third quarter of 2015.
Service revenue from CBR totaled $28.0 million in the third quarter
of 2016, as compared to $7.2 million in the third quarter of
2015.
Total costs and expenses, including costs of product sales and
services, totaled $105.0 million for the third quarter of 2016,
compared with $97.5 million for the same period in 2015. The
increase in operating expenses in 2016 was related to: (i) higher
research and development expenses for the company's next generation
development programs, (ii) higher selling, general and
administrative expenses due to the recognition of a full quarter of
CBR-related expenses, and (iii) higher non-cash amortization of the
Makena intangible asset. These increases were partially offset by
expenses in the third quarter of 2015 that did not recur in 2016
related to an upfront payment for AMAG's exclusive option to
acquire rights to a development stage asset to treat severe
preeclampsia (Velo) and CBR-related acquisition costs.
Third quarter 2016 operating income totaled $38.8 million,
compared with a $1.4 million loss in the third quarter of last
year. The company reported net income of $16.2 million, or $0.47
per basic share and $0.43 per diluted share, for the third quarter
of 2016, compared with a net loss of $20.6 million, or $0.62 per
basic and diluted share, for the same period in 2015.
Balance Sheet HighlightsThe company’s cash, cash equivalents and
investments increased by $147.8 million in the first nine months of
2016 to approximately $614.1 million, net of $20.0 million utilized
to repurchase the company’s common stock and $13.1 million to repay
debt. Total debt (principal amount outstanding), including $200
million of convertible debt, was approximately $1.03 billion as of
September 30, 2016. For the 12 months ended September 30,
2016, sales of Makena exceeded $300 million, triggering a $100
million milestone that will be paid to former Lumara Health
shareholders in the fourth quarter of 2016.
"In the third quarter, we once again generated strong cash flow
as a result of our solid commercial execution and operating
discipline,” stated Ted Myles, chief financial officer of AMAG. "We
are now in an even better position to capitalize on acquisition or
licensing opportunities that would diversify and expand our product
portfolio."
Financial Results (Non-GAAP Basis)1,2Non-GAAP revenues totaled
$145.8 million in the third quarter of 2016, up from $103.5 million
in the third quarter of 2015. Non-GAAP CBR revenue totaled $29.9
million in the third quarter of 2016, compared with $14.5 million
in the same period in 2015. CBR's financial results for the third
quarter of 2015 include only a portion of the quarter, as AMAG
purchased CBR on August 17, 2015. The difference between GAAP and
non-GAAP revenue for the quarter represents purchase accounting
adjustments related to CBR deferred revenue.
Total non-GAAP costs and expenses, including costs of product
sales and services, totaled $69.6 million in the third quarter of
2016, compared with total non-GAAP costs and expenses of $50.6
million in the same period in 2015. Non-GAAP adjusted EBITDA for
the third quarter of 2016 was $76.2 million, compared with $52.8
million for the same period in 2015.
The company generated third quarter 2016 non-GAAP net income of
$61.8 million, or $1.81 per non-GAAP basic share and $1.78 per
non-GAAP diluted share. In the third quarter of 2015, non-GAAP net
income totaled $42.3 million, or $1.27 per non-GAAP basic share and
$1.02 per non-GAAP diluted share. Non-GAAP diluted shares for the
third quarter of 2016 do not include 7.4 million of potentially
dilutive shares from the convertible notes, as the stock price was
below the convertible notes' exercise price.
Updated 2016 Financial Guidance Range3
| |
|
2016 GAAP Guidance |
|
2016 Non-GAAP Guidance |
|
$ in millions |
|
Previous |
Updated |
|
Previous |
Updated |
| Makena sales |
|
$310 -
$340 |
$330 -
$340 |
|
$310 -
$340 |
$330 -
$340 |
| Feraheme
and MuGard sales |
|
$95 -
$105 |
$95 -
$105 |
|
$95 -
$105 |
$95 -
$105 |
| CBR
revenue |
|
$98 - $108 |
$98 - $108 |
|
$115 - $125 |
$115 - $125 |
| Total
revenue |
|
$503 - $553 |
$523 - $553 |
|
$520 - $570 |
$540 - $570 |
| |
|
|
|
|
|
|
| Net income |
|
$0 -
$30 |
$3 -
$23 |
|
$195 -
$225 |
$200 -
$220 |
| Operating income |
|
$93 -
$123 |
$98 -
$118 |
|
N/A |
N/A |
| Adjusted EBITDA |
|
N/A |
N/A |
|
$255 -
$285 |
$260 -
$280 |
| |
|
|
|
|
|
|
Conference Call and Webcast AccessAMAG
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 November 3, 2016 through midnight on
November 10, 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 96588865.
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 November 3, 2016 through midnight on December 3, 2016.
Use of Non-GAAP Financial MeasuresAMAG has
presented certain non-GAAP financial measures, including non-GAAP
revenues, non-GAAP costs and expenses, non-GAAP adjusted EBITDA
(earnings before income taxes, depreciation and amortization),
non-GAAP net income and non-GAAP basic and diluted net income per
share. 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).
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 (loss) and GAAP net
income (loss) per share to calculate non-GAAP 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.
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.
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 StatementsThis 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 anticipated timing to file an sNDA;
expectations for AMAG’s Phase 3 clinical trial for the broader
indication for Feraheme, including the anticipated timing of an
sNDA submission; AMAG’s 2016 updated financial guidance, including
GAAP and non-GAAP revenues, GAAP operating income, non-GAAP
adjusted EBITDA and GAAP and non-GAAP net income; AMAG's intention
to pay a $100 million milestone to former Lumara Health
shareholders in the fourth quarter of 2016; AMAG’s belief that the
generation of strong cash flows in the first nine months of 2016
puts AMAG in a better position to diversify and expand its
portfolio; 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 Reports on Form 10-Q
for the quarters ended March 31, 2016 and June 30, 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.
|
1 |
See summaries of GAAP to non-GAAP adjustments at the conclusion of
this press release. |
| 2 |
See share count
reconciliation at the conclusion of this press release. |
| 3 |
See reconciliation of
2016 financial guidance of non-GAAP adjusted EBITDA and non-GAAP
net income at the conclusion of this press release. |
- Tables Follow -
| |
| AMAG Pharmaceuticals, Inc. |
| Condensed Consolidated Statements of
Operations |
| (unaudited, amounts in thousands, except for
per share data) |
|
|
| |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
|
|
2016 |
|
|
2015 |
|
2016 |
|
2015 |
| Revenues: |
|
|
|
|
|
|
|
|
|
Makena |
|
$ |
93,387 |
|
|
$ |
65,155 |
|
|
$ |
236,824 |
|
|
$ |
184,258 |
|
|
Feraheme/MuGard |
|
22,390 |
|
|
23,762 |
|
|
71,500 |
|
|
66,726 |
|
| Cord
Blood Registry |
|
27,965 |
|
|
7,177 |
|
|
71,863 |
|
|
7,177 |
|
| License
fee, collaboration and other revenues |
|
40 |
|
|
58 |
|
|
313 |
|
|
51,380 |
|
| Total
revenues |
|
143,782 |
|
|
96,152 |
|
|
380,500 |
|
|
309,541 |
|
| Operating costs and
expenses: |
|
|
|
|
|
|
|
|
| Cost of
product sales |
|
25,706 |
|
|
19,088 |
|
|
65,942 |
|
|
59,793 |
|
| Cost of
services |
|
4,984 |
|
|
3,261 |
|
|
15,705 |
|
|
3,261 |
|
| Research
and development expenses |
|
17,116 |
|
|
9,809 |
|
|
45,579 |
|
|
24,981 |
|
| Option
rights to license orphan drug |
|
— |
|
|
10,000 |
|
|
— |
|
|
10,000 |
|
| Selling,
general and administrative expenses |
|
57,216 |
|
|
46,141 |
|
|
172,314 |
|
|
110,054 |
|
|
Impairment charges of intangible assets |
|
— |
|
|
— |
|
|
15,963 |
|
|
— |
|
|
Acquisition-related costs |
|
— |
|
|
8,500 |
|
|
— |
|
|
11,153 |
|
|
Restructuring expenses |
|
— |
|
|
738 |
|
|
712 |
|
|
1,752 |
|
| Total
costs and expenses |
|
105,022 |
|
|
97,537 |
|
|
316,215 |
|
|
220,994 |
|
| Operating income |
|
38,760 |
|
|
(1,385 |
) |
|
64,285 |
|
|
88,547 |
|
| Other income
(expense): |
|
|
|
|
|
|
|
|
| Interest
expense |
|
|
(18,309 |
) |
|
(14,222 |
) |
|
(55,002 |
) |
|
(34,794 |
) |
| Loss on
debt extinguishment |
|
— |
|
|
(10,449 |
) |
|
— |
|
|
(10,449 |
) |
| Interest
and dividend income |
|
838 |
|
|
524 |
|
|
2,319 |
|
|
967 |
|
| Other
income (expense) |
|
(24 |
) |
|
(9,182 |
) |
|
197 |
|
|
(9,180 |
) |
| Total
other income (expense) |
|
(17,495 |
) |
|
(33,329 |
) |
|
(52,486 |
) |
|
(53,456 |
) |
| Income (loss) before
income taxes |
|
21,265 |
|
|
(34,714 |
) |
|
11,799 |
|
|
35,091 |
|
| Income tax expense
(benefit) |
|
5,069 |
|
|
(14,130 |
) |
|
3,725 |
|
|
9,513 |
|
| Net income (loss) |
|
$ |
16,196 |
|
|
$ |
(20,584 |
) |
|
$ |
8,074 |
|
|
$ |
25,578 |
|
| Net income (loss) per
share |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.47 |
|
|
$ |
(0.62 |
) |
|
$ |
0.23 |
|
|
$ |
0.84 |
|
|
Diluted |
|
$ |
0.43 |
|
|
$ |
(0.62 |
) |
|
$ |
0.23 |
|
|
$ |
0.73 |
|
| Weighted average shares
outstanding used to compute net income (loss) per share: |
|
|
|
|
|
|
|
|
|
Basic |
|
34,171 |
|
|
33,223 |
|
|
34,377 |
|
|
30,379 |
|
|
Diluted |
|
42,111 |
|
|
33,223 |
|
|
34,764 |
|
|
34,962 |
|
| AMAG Pharmaceuticals, Inc. |
| Condensed Consolidated Balance
Sheets |
| (unaudited, amounts in thousands) |
| |
|
|
|
| |
September 30, 2016 |
|
December 31, 2015 |
|
ASSETS |
|
|
|
| Current assets: |
|
|
|
| Cash and
cash equivalents |
$ |
305,279 |
|
|
$ |
228,705 |
|
|
Investments |
308,792 |
|
|
237,626 |
|
| Accounts
receivable, net |
70,079 |
|
|
85,678 |
|
|
Inventories |
38,157 |
|
|
40,645 |
|
|
Receivable from collaboration |
— |
|
|
428 |
|
| Prepaid
and other current assets |
14,474 |
|
|
13,592 |
|
| Total
current assets |
736,781 |
|
|
606,674 |
|
| Property, plant and
equipment, net |
25,255 |
|
|
28,725 |
|
| Goodwill |
639,484 |
|
|
639,188 |
|
| Intangible assets,
net |
1,122,535 |
|
|
1,196,771 |
|
| Restricted cash |
2,593 |
|
|
2,593 |
|
| Other long-term
assets |
1,005 |
|
|
2,259 |
|
| Total
assets |
$ |
2,527,653 |
|
|
$ |
2,476,210 |
|
| |
|
|
|
| LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
|
|
| Current
liabilities: |
|
|
|
| Accounts
payable |
$ |
4,742 |
|
|
$ |
4,906 |
|
| Accrued
expenses |
126,363 |
|
|
106,363 |
|
| Current
portion of long-term debt |
62,791 |
|
|
17,500 |
|
| Current
portion of acquisition-related contingent consideration |
100,359 |
|
|
96,967 |
|
| Deferred
revenues |
34,653 |
|
|
20,185 |
|
| Total
current liabilities |
328,908 |
|
|
245,921 |
|
| Long-term
liabilities: |
|
|
|
| Long-term
debt, net |
747,869 |
|
|
803,669 |
|
|
Convertible 2.5% notes, net |
177,146 |
|
|
170,749 |
|
|
Acquisition-related contingent consideration |
127,094 |
|
|
125,592 |
|
| Deferred
tax liabilities |
192,608 |
|
|
189,145 |
|
| Deferred
revenues |
12,513 |
|
|
5,093 |
|
| Other
long-term liabilities |
3,562 |
|
|
3,777 |
|
| Total
liabilities |
1,589,700 |
|
|
1,543,946 |
|
| Total stockholders’
equity |
937,953 |
|
|
932,264 |
|
| Total liabilities and
stockholders’ equity |
$ |
2,527,653 |
|
|
$ |
2,476,210 |
|
| AMAG Pharmaceuticals, Inc. |
| Reconciliation of Non-GAAP Adjustments to Net
Income |
| (unaudited, amounts in
thousands) |
| |
|
|
|
|
|
|
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
|
| GAAP revenues |
$ |
143,782 |
|
|
$ |
96,152 |
|
|
$ |
380,500 |
|
|
$ |
309,541 |
|
|
| Service
revenues |
1,985 |
|
4 |
7,321 |
|
4 |
15,600 |
|
4 |
7,321 |
|
4 |
| License
fee, collaboration and other revenues |
— |
|
|
— |
|
|
— |
|
|
(39,965 |
) |
5 |
| Non-GAAP revenues |
145,767 |
|
|
103,473 |
|
|
396,100 |
|
|
276,897 |
|
|
| |
|
|
|
|
|
|
|
|
| GAAP CBR revenues |
27,965 |
|
|
7,177 |
|
|
71,863 |
|
|
7,177 |
|
|
| Service
revenues |
1,985 |
|
4 |
7,321 |
|
4 |
15,600 |
|
4 |
7,321 |
|
4 |
| Non-GAAP CBR
revenues |
29,950 |
|
|
14,498 |
|
|
87,463 |
|
|
14,498 |
|
|
| |
|
|
|
|
|
|
|
|
| GAAP costs of product
sales and services |
30,690 |
|
|
22,349 |
|
|
81,647 |
|
|
63,054 |
|
|
| Cost of
product sales |
(20,915 |
) |
6 |
(15,336 |
) |
6 |
(53,151 |
) |
6 |
(49,597 |
) |
6 |
| Cost of
services |
(359 |
) |
7 |
(215 |
) |
7 |
(1,072 |
) |
7 |
(215 |
) |
7 |
| Non-GAAP costs of
product sales and services |
9,416 |
|
|
6,798 |
|
|
27,424 |
|
|
13,242 |
|
|
| |
|
|
|
|
|
|
|
|
| GAAP costs and
expenses |
105,022 |
|
|
97,537 |
|
|
316,215 |
|
|
220,994 |
|
|
| Cost of
product sales |
(20,915 |
) |
6 |
(15,336 |
) |
6 |
(53,151 |
) |
6 |
(49,597 |
) |
6 |
| Cost of
services |
(359 |
) |
7 |
(215 |
) |
7 |
(1,072 |
) |
7 |
(215 |
) |
7 |
| Research
and development expenses |
(901 |
) |
8 |
(1,550 |
) |
8 |
(3,541 |
) |
8 |
(3,241 |
) |
8 |
| Selling,
general and administrative expenses |
(13,244 |
) |
9 |
(10,561 |
) |
9 |
(33,971 |
) |
9 |
(20,246 |
) |
9 |
| Option
rights to license orphan drug |
— |
|
|
(10,000 |
) |
10 |
— |
|
|
(10,000 |
) |
10 |
|
Impairment charges of intangible assets |
— |
|
|
— |
|
|
(15,963 |
) |
11 |
— |
|
|
|
Acquisition-related costs |
— |
|
|
(8,500 |
) |
12 |
— |
|
|
(11,153 |
) |
12 |
|
Restructuring expenses |
— |
|
|
(738 |
) |
13 |
(712 |
) |
13 |
(1,752 |
) |
13 |
| Non-GAAP costs and
expenses |
69,603 |
|
|
50,637 |
|
|
207,805 |
|
|
124,790 |
|
|
| |
|
|
|
|
|
|
|
|
| GAAP other income
(expense), including income tax expense (benefit) |
(22,564 |
) |
|
(19,199 |
) |
|
(56,211 |
) |
|
(62,969 |
) |
|
| Non-cash
interest expense |
3,171 |
|
14 |
3,111 |
|
14 |
9,333 |
|
14 |
8,943 |
|
14 |
| Loss on
debt extinguishment |
— |
|
|
10,449 |
|
15 |
— |
|
|
10,449 |
|
15 |
| Other
income (expense) |
— |
|
|
9,187 |
|
16 |
— |
|
|
9,185 |
|
16 |
| Income
tax expense (benefit) |
5,069 |
|
17 |
(14,130 |
) |
17 |
3,725 |
|
17 |
9,513 |
|
17 |
| Non-GAAP other income
(expense) |
(14,324 |
) |
|
(10,582 |
) |
|
(43,153 |
) |
|
(24,879 |
) |
|
| |
|
|
|
|
|
|
|
|
| GAAP net income
(loss) |
16,196 |
|
|
(20,584 |
) |
|
8,074 |
|
|
25,578 |
|
|
| Total
adjustments |
45,644 |
|
|
62,838 |
|
|
137,068 |
|
|
101,650 |
|
|
| Non-GAAP net income
(loss) |
61,840 |
|
|
42,254 |
|
|
145,142 |
|
|
127,228 |
|
|
| 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 |
Eliminate one-time
costs related to Velo option. |
| 11 |
Impairment expense of
$15.7 million related to the MuGard intangible asset and $0.2
million related to the favorable lease intangible asset |
| 12 |
Adjustments to
eliminate one-time costs related to CBR acquisition. |
| 13 |
Adjustments to
eliminate non-recurring restructuring costs. |
| 14 |
Adjustments to
eliminate non-cash interest expense. |
| 15 |
Eliminate non-cash or
one-time expenses related to the August 2015 term loan
refinancing. |
| 16 |
Eliminate one-time
expenses related to the August 2015 debt financing. |
| 17 |
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 September 30, |
|
Nine Months Ended September 30, |
| |
2016 |
|
2015 |
|
2016 |
|
2015 |
| GAAP Net Income
(Loss) |
$ |
16,196 |
|
|
$ |
(20,584 |
) |
|
$ |
8,074 |
|
|
$ |
25,578 |
|
| Adjustments: |
|
|
|
|
|
|
|
| Interest
expense, net |
17,471 |
|
|
13,698 |
|
|
52,683 |
|
|
33,827 |
|
| Loss on
debt extinguishment |
— |
|
|
10,449 |
|
|
— |
|
|
10,449 |
|
| Other
income |
24 |
|
|
9,182 |
|
|
(197 |
) |
|
9,180 |
|
| Provision
for income tax |
5,069 |
|
|
(14,130 |
) |
|
3,725 |
|
|
9,513 |
|
| Operating
income |
38,760 |
|
|
(1,385 |
) |
|
64,285 |
|
|
88,547 |
|
| Purchase
accounting adjustments related to CBR deferred revenue |
1,985 |
|
|
7,321 |
|
|
15,600 |
|
|
7,321 |
|
| Non-cash
collaboration revenue |
— |
|
|
— |
|
|
— |
|
|
(39,965 |
) |
|
Depreciation and intangible asset amortization |
24,672 |
|
|
15,350 |
|
|
65,104 |
|
|
40,333 |
|
| Non-cash
inventory step-up adjustments |
1,573 |
|
|
2,122 |
|
|
4,718 |
|
|
11,948 |
|
|
Stock-based compensation |
5,468 |
|
|
4,889 |
|
|
16,808 |
|
|
11,572 |
|
|
Adjustments to contingent consideration |
3,708 |
|
|
2,886 |
|
|
5,106 |
|
|
4,525 |
|
| Option
rights to license orphan drug |
— |
|
|
10,000 |
|
|
— |
|
|
10,000 |
|
|
Impairment charges of intangible assets |
— |
|
|
— |
|
|
15,963 |
|
|
— |
|
|
Acquisition-related costs |
— |
|
|
10,901 |
|
|
— |
|
|
13,735 |
|
|
Restructuring costs |
— |
|
|
753 |
|
|
712 |
|
|
4,090 |
|
| Non-GAAP
adjusted EBITDA |
76,166 |
|
|
52,837 |
|
|
188,296 |
|
|
152,106 |
|
| Cash
interest |
(14,323 |
) |
|
(10,582 |
) |
|
(43,154 |
) |
|
(24,879 |
) |
| Non-GAAP Net
Income |
$ |
61,843 |
|
|
$ |
42,255 |
|
|
$ |
145,142 |
|
|
$ |
127,227 |
|
| |
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
| GAAP net income (loss)
per share - Basic |
$ |
0.47 |
|
|
$ |
(0.62 |
) |
|
$ |
0.23 |
|
|
$ |
0.84 |
|
| Shares used in GAAP per
share computation |
34,171 |
|
|
33,223 |
|
|
34,377 |
|
|
30,379 |
|
| Non-GAAP net income per
share - Basic |
$ |
1.81 |
|
|
$ |
1.27 |
|
|
$ |
4.22 |
|
|
$ |
4.19 |
|
| Shares used in non-GAAP
per share computation |
|
34,171 |
|
|
|
33,223 |
|
|
|
34,377 |
|
|
|
30,379 |
|
| |
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
| GAAP net income (loss)
per share - Diluted |
$ |
0.43 |
|
|
$ |
(0.62 |
) |
|
$ |
0.23 |
|
|
$ |
0.73 |
|
| Shares used in GAAP per
share computation |
42,111 |
|
|
33,223 |
|
|
34,764 |
|
|
34,962 |
|
| Non-GAAP net income per
share - Diluted |
$ |
1.78 |
|
|
$ |
1.02 |
|
|
$ |
4.18 |
|
|
$ |
3.31 |
|
| Shares used in non-GAAP
per share computation |
|
34,730 |
|
|
|
41,229 |
|
|
|
34,764 |
|
|
|
38,430 |
|
| 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 |
| |
Previous |
|
Updated |
| GAAP Net
Income |
$0 - $30 |
|
|
$3 - $23 |
|
| Adjustments: |
|
|
|
|
|
| Interest
expense |
73 |
|
|
73 |
|
| Provision
for income tax |
20 |
|
|
22 |
|
|
Operating income |
$93 - $123 |
|
|
$98 - $118 |
|
| Purchase
accounting adjustments related to CBR deferred revenue |
17 |
|
|
17 |
|
|
Depreciation and intangible asset amortization |
91 |
|
|
91 |
|
| Non-cash
inventory step-up adjustments |
5 |
|
|
5 |
|
|
Stock-based compensation |
26 |
|
|
26 |
|
|
Adjustments to contingent consideration |
6 |
|
|
6 |
|
|
Impairment charges of intangible assets |
16 |
|
|
16 |
|
|
Restructuring costs |
1 |
|
|
1 |
|
| Non-GAAP adjusted
EBITDA |
$255 - $285 |
|
|
$260 - $280 |
|
| Cash
interest |
(60 |
) |
|
(60 |
) |
| Non-GAAP Net
Income |
$195 - $225 |
|
|
$200 - $220 |
|
| AMAG Pharmaceuticals, Inc. |
| Share Count Reconciliation |
| (unaudited, amounts in millions) |
|
|
| |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
| |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
| Weighted
average basic shares outstanding |
|
34.2 |
|
|
33.2 |
|
|
34.4 |
|
|
30.4 |
|
|
| Employee
equity incentive awards |
|
0.5 |
|
|
— |
|
18 |
|
0.4 |
|
|
1.6 |
|
|
|
Convertible notes |
|
7.4 |
|
|
— |
|
18 |
|
— |
|
18 |
|
— |
|
18 |
|
|
Warrants |
|
— |
|
18 |
|
— |
|
18 |
|
— |
|
18 |
|
3.0 |
|
|
| GAAP diluted
shares outstanding |
|
42.1 |
|
|
33.2 |
|
|
34.8 |
|
|
35.0 |
|
|
| Employee
equity incentive awards |
|
— |
|
|
1.5 |
|
19 |
|
— |
|
|
— |
|
|
|
Convertible notes |
|
(7.4 |
) |
19 |
|
7.4 |
|
19 |
|
— |
|
|
7.4 |
|
19 |
|
| Effect of
bond hedge and warrants |
|
— |
|
|
(0.9 |
) |
20 |
|
— |
|
|
(4.0 |
) |
20 |
|
| Non-GAAP
diluted shares outstanding |
|
34.7 |
|
|
41.2 |
|
|
34.8 |
|
|
38.4 |
|
|
| 18 |
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. |
| 19 |
Reflects the Non-GAAP
dilutive impact of employee equity incentive awards and convertible
notes. |
| 20 |
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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