On January 8, 2018 AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) reported a business update, including preliminary unaudited fourth quarter and full year 2017 financial results and 2018 financial guidance (Press release, AMAG Pharmaceuticals, JAN 8, 2018, View Source [SID1234522984]). The company will present further details at the 36th Annual J.P. Morgan Healthcare Conference in San Francisco on Tuesday, January 9, 2018 at 10:00 a.m. PT (1:00 p.m. ET). A live audio webcast of the presentation and following breakout session will be accessible through the Investors section of AMAG’s website at www.amagpharma.com.
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William Heiden, AMAG’s president and chief executive officer, said, "Over the last few years we have transformed AMAG from a one product company into a company with five marketed products and two additional products in development. Today we are reporting double-digit revenue growth in 2017 of more than $600 million, along with strong bottom-line cash generation. Throughout the year, we also achieved many important goals that will be key to our long-term success, including the establishment of our new 200-person women’s health commercial team, the launch of Intrarosa (prasterone), a novel women’s health product, and the filing of supplemental new drug applications to extend our Makena and Feraheme brands."
"Our flexible operating plan supports the 2018 top-line revenue and adjusted EBITDA guidance ranges provided today, which incorporate the opportunities and key risks across our product portfolio. 2018 promises to be an exciting year for AMAG with many key value drivers ahead of us, including potential FDA approvals of the Makena subcutaneous auto-injector and the Feraheme broad label, as well as building on the successful launch of Intrarosa, with approximately 20,000 total prescriptions already written by more than 4,200 healthcare providers since our July 2017 launch," Mr. Heiden concluded.
Preliminary Fourth Quarter and Full Year 2017 Financial Results (unaudited)
Fourth Quarter 2017
AMAG expects total GAAP revenue for the fourth quarter of 2017 to be between $155 million and $162 million, representing approximately 5% growth over the same period in 2016. This includes Makena (hydroxyprogesterone caproate injection) net product sales of between $97 million and $102 million, Feraheme (ferumoxytol) injection and MuGard net product sales of between $26 million and $28 million, Intrarosa (launched in July 2017) net product sales of approximately $2 million, and Cord Blood Registry (CBR) service revenue of approximately $30 million.
AMAG expects total fourth quarter 2017 total non-GAAP revenue to be between $156 million and $163 million, which reflects a $1.4 million purchase accounting adjustment related to CBR deferred revenue.
For the fourth quarter of 2017, AMAG expects an operating loss of between $6 million and $16 million and adjusted EBITDA of between $58 million and $68 million.1
Full Year 2017
AMAG expects 2017 total GAAP revenue to be between $607 million and $614 million, representing 15% growth over 2016. This includes Makena net product sales of between $385 million and $390 million, Feraheme and MuGard net product sales of between $106 million and $108 million, Intrarosa net product sales of approximately $2 million, and CBR service revenue of approximately $114 million.
AMAG expects 2017 total non-GAAP revenue to be between $613 million and $620 million, which reflects a $5.5 million purchase accounting adjustment related to CBR deferred revenue.
For the full year of 2017, AMAG expects an operating loss of between $292 million and $302 million (due primarily to a third quarter non-cash accounting charge) and adjusted EBITDA of between $220 million and $230 million, the higher end of the guidance range.
In 2017, AMAG reduced total debt by approximately 20%, extended average debt maturities, and repurchased and retired approximately 1.4 million shares in the fourth quarter at an average price of $14.27 per share.
The company ended 2017 with approximately $329 million in cash and investments and total debt (principal amount outstanding) of approximately $815 million. In late February 2018, the company expects to report final financial results for the fourth quarter and audited results for full year of 2017.
2018 Financial Guidance
The company is providing the following financial guidance for 2018. This guidance encompasses management’s current assumptions about the potential impact of multiple opportunities and risks across AMAG’s product portfolio, including various potential outcomes of the pending FDA submissions for the Makena subcutaneous auto-injector and the Feraheme label expansion, as well as the entrance of generics to compete with the Makena intramuscular formulation in 2018.
$ in millions 2018 GAAP Guidance 2018 Non-GAAP Guidance
Total revenue $500 – $560 $500 – $560
Operating loss ($147) – ($117) N/A
Adjusted EBITDA N/A $100 – $130
2018 Key Dates and Priorities
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February 2, 2018: PDUFA date for the expansion of the Feraheme label beyond the current chronic kidney disease (CKD) indication to include all eligible adult patients with iron deficiency anemia (IDA); prepare for first quarter 2018 potential approval and subsequent launch;
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February 3, 2018: loss of Makena orphan drug exclusivity – While the company is currently ready with a partner to launch its own authorized generic to the intramuscular formulation (IM) as early as February, the company believes that a generic competitor may not enter the market until later in 2018;
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February 14, 2018: PDUFA date for Makena subcutaneous auto-injector; prepare for first quarter 2018 potential approval and subsequent launch;
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First quarter 2018: submit bremelanotide new drug application to FDA;
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Continue to broaden awareness and drive prescriptions of Intrarosa
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Increase formulary coverage (65% unrestricted commercial lives covered anticipated by month end);
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Increase the number of healthcare professional prescribers (from ~4,200 achieved in 2017);
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Increase the number of total prescriptions written (from ~20,000 in 2017);
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Increase market share (from year-end weekly NRx share of 2.6%);
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Launch digital-to-direct consumer campaign in first half of 2018;
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Expand CBR first time enrollments; and
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Further diversify product portfolio through disciplined business development.
"In 2017, we delivered strong top-line and adjusted EBITDA results while investing aggressively in the products that will drive our future growth. We also improved our liability profile so that our balance sheet is better aligned with our evolving business strategy. Finally, we have managed and will continue to manage our expenses carefully to maintain operational flexibility," said Ted Myles, AMAG’s chief financial officer. "We are guiding to continued positive adjusted EBITDA generation in 2018, and with $329 million of cash on hand as of December 31, 2017, we are in a strong position to continue to invest in our current products, while remaining active in the search for additional asset acquisitions or licensing transactions that provide durable, long-term growth."
Webcast Information
A live audio webcast of the company’s presentation and the following breakout session, along with the accompanying slide presentation at the 36th Annual J.P. Morgan Healthcare Conference, will be accessible through the Investors section of the company’s website at www.amagpharma.com on January 9, 2018 at 10:00 a.m. P.T. (1:00 p.m. E.T.). Following the conference, the webcast will be archived on the company’s website until February 9, 2018.
Use of Non-GAAP Financial Measures
AMAG has presented certain non-GAAP financial measures, including non-GAAP revenue and non-GAAP adjusted EBITDA (earnings before income taxes, depreciation and amortization). These non-GAAP financial measures exclude certain amounts, revenue, expenses or income, from the corresponding financial measures determined in accordance with accounting principles generally accepted in the U.S. (GAAP). Management believes this non-GAAP information is useful for investors, taken in conjunction with AMAG’s GAAP financial statements, because it provides greater transparency regarding AMAG’s operating performance. Management uses these measures, among other factors, to assess and analyze operational results and trends and to make financial and operational 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. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. 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 at the conclusion of this press release.