Integration of Lumara Health acquisition
substantially complete
Estimated pro forma fourth quarter 2014 product
sales of $74 million
2015 sales guidance of $355 million represents
+300% increase over 2014 sales
AMAG Pharmaceuticals, Inc. (Nasdaq:AMAG) today provided a business
update, including preliminary unaudited 2014 fourth quarter and
annual financial results and its financial outlook for 2015. The
company will present further details at the 33rd Annual J.P. Morgan
Healthcare Conference in San Francisco on Wednesday, January 14,
2015, at 8:00 a.m. Pacific time.
"The preliminary 2014 financial results and 2015 guidance that
we are issuing today both reinforce the key themes of continuing
operational excellence on our current business and the
transformative nature of our acquisition of Lumara Health in
November 2014," said William Heiden, president and chief executive
officer of AMAG. "In 2014, the AMAG team drove nearly 20% sales
growth for Feraheme® in the U.S., now in its sixth year since
launch. We have rapidly integrated the Lumara Health business, and
the positive financial impact of our new maternal health division
is already apparent in our fourth quarter results, and is even more
evident in the 2015 financial guidance issued today."
Preliminary 2014 Financial Results
(unaudited)
AMAG's preliminary unaudited financial results for the fourth
quarter and full year 2014 include the results of Lumara Health,
effective from the closing date of the acquisition (November 12,
2014) through the end of 2014.
- Fourth Quarter 2014
- AMAG expects total revenues of between $52.8 million and $54.5
million. This includes approximately $6.0 million of revenue
recognized from AMAG's collaboration agreement with Takeda
Pharmaceutical Company Limited (Takeda) for commercialization of
Feraheme (ferumoxytol) Injection/RiensoTM outside of the U.S.,
which was mutually terminated in December 2014.
- Net product sales totaled between $47.2 million and $48.2
million, including between $23.8 million and $24.3 million of sales
from Feraheme in the U.S. (which includes approximately $1.8
million in revenue associated with a favorable change in estimated
Feraheme product returns reserves) and between $23.1 million and
$23.6 million of sales from Makena®(hydroxyprogesterone caproate
injection).
- Total operating expenses are expected to be between $41.5
million and $42.8 million. Excluding non-cash and one-time
charges1, adjusted operating expenses are expected to be between
$28.2 million and $29.5 million, which includes Lumara Health
expenses from the closing date.
- AMAG expects pro forma net product sales of between $72.7
million and $74.7 million for the fourth quarter of 2014. The pro
forma amounts represent total net product sales as if the
acquisition of Lumara Health (and Makena) had occurred as of the
beginning of the fourth quarter.
- Full Year 2014
- AMAG expects 2014 total revenues of between $123.8 million and
$125.5 million. This includes approximately $14.0 million of
revenue recognized from AMAG's collaboration agreement with
Takeda.
- Net product sales totaled between $110.1 million and $111.1
million. U.S. Feraheme net sales are expected to be between $85.8
million and $86.3 million and Makena sales are expected to be
between $23.1 million and $23.6 million. The 19% growth in 2014
Feraheme sales over 2013 was driven by significant increases in
volume, as well as increasing net revenue per gram.
- Total operating expenses for 2014 are expected to be between
$104.6 million and $105.9 million. Excluding non-cash and
one-time charges2, adjusted operating expenses are expected to be
between $84.2 million and $85.5 million, which includes Lumara
Health expenses from the closing date.
- AMAG expects 2014 pro forma net product sales of between $252.0
million and $255.5 million, including U.S. Feraheme net product
sales and pro forma Makena sales of $165.0 million to $168.0
million. The pro forma amounts represent total net product sales as
if the acquisition of Lumara Health (and Makena) had occurred as of
the beginning of 2014.
- The company ended 2014 with approximately $143.6
million in cash and investments, $540 million in debt and 25.6
million basic shares outstanding.
Additional Business Updates
- As part of a multi-pronged line extension/lifecycle management
program for Makena, the company announced today that a
preservative-free, single-dose (1 mL) vial for Makena has been
filed and is under review at the U.S. Food and Drug Administration
(FDA) with a decision expected in the second quarter of 2015.
Makena is currently only available in a 5-dose (5 mL) vial.
- In June 2014, AMAG proposed to the FDA certain changes to the
current Feraheme label for the treatment of iron deficiency anemia
(IDA) in adult chronic kidney disease (CKD) patients to mitigate
the risk of hypersensitivity. In January 2015, the FDA responded
with recommended label changes that go beyond what the company
proposed in June 2014. The company plans to submit a response to
the FDA's recommendations and will work with the FDA to finalize an
updated label.
- AMAG is awaiting feedback from the FDA regarding the study
design that AMAG submitted to the FDA in 2014 to generate
additional safety data to support expansion of the U.S. Feraheme
label beyond the current CKD indication to include all adult
patients with IDA who have failed or cannot tolerate oral iron
treatment.
- As announced in December 2014, AMAG will regain all worldwide
development and commercialization rights for Feraheme/Rienso
following the transfer of marketing authorizations. Previously,
Takeda had been commercializing the product outside of the U.S.
under a March 2010 license arrangement with AMAG.
2015 Financial Outlook
The company expects to achieve the following in 2015:
- Total revenue of between $380 million and $420 million,
including:
- Total product sales of between $335 million and $375 million,
including:
- Makena net sales of between $245 million and $270 million;
- Feraheme and MuGard net sales of between $90 million and $105
million; and
- Collaboration revenue of approximately $45 million related to
the Takeda agreement, which was mutually terminated in December
2014, most of which is non-cash.
- Non-GAAP adjusted EBITDA3 of between $180 million and $200
million; and
- Non-GAAP cash earnings3 of between $150 million and $170
million.
Heiden concluded by stating, "2014 was a transformative year for
AMAG. We are now on track to becoming a highly profitable specialty
pharmaceutical company with strong growth potential across a
diversified portfolio in attractive market segments. I want to
thank my colleagues for their unwavering commitment to excellence
and to pursuing opportunities that make real differences in the
lives of thousands of patients and their families. As we begin
2015, we are excited by our prospects for future growth and
shareholder value creation through continued revenue growth from
our current products and future portfolio expansion."
Webcast Information
A live audio webcast of the company's presentation and the
following breakout session, along with the accompanying slide
presentation at the 33rd Annual J.P. Morgan Healthcare Conference,
will be accessible through the Investors section of the company's
website at www.amagpharma.com on January 14, 2015 at 8:00 a.m. P.T.
(11:00 a.m. E.T.). Following the conference, the webcast will
be archived on the company's website until February 14, 2015.
About AMAG
AMAG Pharmaceuticals, Inc. is a specialty pharmaceutical company
with a focus on maternal health, anemia and cancer supportive care.
The primary goal of AMAG and its maternal health division, Lumara
HealthTM, is to bring to market therapies that provide clear
benefits and improve patients' lives. In addition to continuing to
pursue opportunities to make new advancements in patients' health
and to enhance treatment accessibility, AMAG intends to continue to
expand and diversify its portfolio through the in-license or
purchase of additional pharmaceutical products or companies. 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 with a singleton pregnancy 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 U.S. product information, including full
prescribing information, please visit www.makena.com.
About Feraheme® (ferumoxytol) Injection
/Rienso
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 five 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.
Ferumoxytol received marketing approval in Canada in December
2012, where it has been marketed by Takeda as Feraheme, and in the
European Union in June 2013 where it has been marketed by Takeda as
Rienso. Ferumoxytol received marketing approval in Switzerland in
August 2013. Takeda had been commercializing the product outside of
the U.S. under a license arrangement with AMAG. In December
2014, AMAG and Takeda mutually agreed to terminate the license
arrangement and are in the process of transferring the licensed
rights back to AMAG.
Feraheme is contraindicated in patients with known
hypersensitivity to Feraheme or any of its components. Serious
hypersensitivity reactions, including anaphylactic-type reactions,
have been reported in patients receiving Feraheme/Rienso. Serious
adverse reactions of clinically significant hypotension have been
reported in the post-marketing experience of Feraheme.
For additional U.S. product information, including full
prescribing information, please visit www.feraheme.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, statements regarding AMAG's expectations as to preliminary
fourth quarter and full year financial results, including total
revenues, net product sales (actual and pro forma), and operating
expenses; expectations regarding integration efforts and status for
the Lumara Health division and expectations as to related synergy
cost savings, the performance of Makena and the resulting impact on
AMAG's fourth quarter, full year and future financial results; the
relationship between AMAG and Takeda and transitioning activities;
beliefs regarding AMAG's position for portfolio expansion and
growth, as well as AMAG's growth potential; plans to create
shareholder value; expected timing and nature of interactions with
the FDA and EMA and other regulatory authorities, including label
changes, study designs and expansion of the product label, and any
regulatory decisions resulting from such interactions; and AMAG's
2015 financial outlook, including potential profitability (and the
magnitude thereof), Makena product sales, Feraheme product sales
(which range takes into account expected label changes), adjusted
EBITDA and cash earnings, 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) demand
for Feraheme and AMAG's ability to successfully compete in the
intravenous iron replacement market as a result of the FDA's
recommended label changes, including a boxed warning which would
provide, among other things, (i) that Feraheme be administered only
when personnel and therapies are immediately available for the
treatment of anaphylaxis and other hypersensitivity reactions, (ii)
observation for signs or symptoms of hypersensitivity reactions
during and for at least 30 minutes following infusion and (iii)
that hypersensitivity reactions have occurred in patients in whom a
previous Feraheme dose was tolerated; (2) the outcome and timing of
the process in accordance with Section 505(o) of the Federal Food,
Drug and Cosmetic Act whereby the FDA is authorized to require AMAG
to make safety-related label changes, including prescribed periods
for submitting proposed changes to the label recommended by the
FDA; (3) the impact on sales if AMAG disseminates future Dear
Healthcare Provider letters; (4) the ability of AMAG to invest in
the development and commercialization of Feraheme/Rienso outside
the U.S., and the level of commercial success of any of such
efforts, given the December 2014 arrangement to terminate AMAG's
and Takeda's license arrangement; (5) uncertainties regarding the
likelihood and timing of potential approval of Feraheme/Rienso in
the U.S., the EU and Canada in the broader IDA indication; (6) the
possibility that following review of new safety information, the
FDA or regulators in Europe and Canada will request additional
technical or scientific information, new studies or reanalysis of
existing data, on-label warnings, post-marketing
requirements/commitments or risk evaluation and mitigation
strategies (REMS) in the current CKD indication for
Feraheme/Rienso, or cause Feraheme/Rienso to be withdrawn from the
market, and the additional costs and expenses that will or may be
incurred in connection with such activities; (7) the possibility
that significant safety or drug interaction problems could arise
with respect to Feraheme/Rienso or Makena and in turn affect sales
or AMAG's ability to market such product; (8) AMAG's patents and
proprietary rights; (9) maintaining the benefits associated with
Makena's orphan drug exclusivity status; (10) the risk of an
Abbreviated New Drug Application (ANDA) filing, especially (i) as
to Feraheme following the FDA's draft bioequivalence recommendation
for ferumoxytol published in December 2012 and (ii) as to Makena
given the history of the approved drug Delalutin (the original
version of 17-alpha-hydroxyprogesterone caproate) for conditions
other than reducing the risk of preterm birth; (11) AMAG's ability
to execute on, or to realize the expected results from, its
long-term strategic plan; (12) the possibility that AMAG will not
realize expected synergies and other benefits from its acquisition
of Lumara Health, as well as AMAG's ability to pursue additional
business development opportunities, especially in light of AMAG's
being highly leveraged; (13) the impact on sales of Makena from
competitive, commercial payor, government (including federal and
state Medicaid reimbursement policies), physician, patient or
public responses with respect to product pricing, product access
and sales and marketing initiatives, as well as patient compliance
and the number of preterm birth risk pregnancies for which Makena
may be prescribed; (14) the likelihood that labeling changes may be
used to support product liability claims that the prior product
labeling did not adequately disclose the risk of adverse events;
(15) compliance with restrictive and affirmative covenants with
respect to substantial indebtedness incurred to finance the
acquisition of Lumara Health, including a requirement that AMAG
reduce its leverage over time; (16) the possibility that AMAG will
need to raise additional capital from the sale of its common stock,
which will cause significant dilution to its stockholders, in order
to satisfy its contractual obligations, including its debt service,
milestone payments that may become payable to Lumara Health's
stockholders, or in order to pursue business development
activities; (17) the availability and timing of tax net operating
loss carryforwards; (18) the manufacture of AMAG's products,
including any significant interruption in the supply of raw
materials or finished product and (19) other risks identified in
AMAG's filings with the U.S. Securities and Exchange Commission
(SEC), including its Quarterly Report on Form 10-Q for the quarter
ended September 30, 2014 and subsequent filings with the SEC. Any
of the above 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. Use of the term "including" in the two
paragraphs above shall mean in each case "including, but not
limited to." 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
PlasmaTech Biopharmaceuticals, Inc. (formerly known as Access
Pharmaceuticals, Inc.). Rienso™ is a trademark of Takeda
Pharmaceutical Company Limited. Lumara Health™ is a trademark of
Lumara Health Inc. Makena® is a registered trademark of Lumara
Health Inc.
Non-GAAP Financial
Measures Reconciliation for Forward-Looking Guidance |
|
($ in millions) |
2015 Guidance |
GAAP Net Income |
$95 - $105 |
Add - depreciation and amortization of
intangibles |
$50 - $55 |
Add - interest expense, net |
$40 |
EBITDA |
$185 - $200 |
Less - non-cash collaboration
revenue |
$41 - $42 |
Add - non-cash inventory
step-up |
$10 - $12 |
Add - stock compensation |
$12 - $14 |
Add - adjustment to contingent
consideration |
$15 - $16 |
Add - severance and
restructuring |
$2 - $3 |
Adjusted EBITDA |
$180 - $200 |
Less - cash interest expense, net |
$30 |
Cash earnings |
$150 - $170 |
1 Non-cash and one-time charges include $10.9 million of
transaction-related expenses and severance related to the Lumara
Health acquisition in November 2014 and stock compensation of $2.4
million.
2 Non-cash and one-time charges include $11.9 million of
transaction-related expenses and severance related to the Lumara
Health acquisition in November 2014 and stock compensation of $8.5
million.
3 See summary of non-GAAP adjustments at conclusion of press
release
CONTACT: AMAG Pharmaceuticals, Inc.
Katie Payne, 617-498-3303
AMAG Pharmaceuticals (NASDAQ:AMAG)
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