AMAG Pharmaceuticals Announces Financial Results for the Third Quarter and Nine Months Ended September 30, 2012

  AMAG Pharmaceuticals Announces Financial Results for the Third Quarter and
  Nine Months Ended September 30, 2012

  *Year-over-year quarterly Feraheme® sales and provider demand growth
    continued
  *Reduced operating expenses by 42% from the third quarter of 2011
  *Updates financial guidance for 2012, raising Feraheme sales and lowering
    expense forecasts

Business Wire

LEXINGTON, Mass. -- November 01, 2012

AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG), a specialty pharmaceutical company
focused on the development and commercialization of Feraheme® (ferumoxytol)
Injection for intravenous (IV) use to treat iron deficiency anemia (IDA),
today reported unaudited consolidated financial results for the third quarter
ended September 30, 2012. The company ended the third quarter of 2012 with
approximately $211 million of cash, cash equivalents and investments.

Business Update

  *Total revenues for the third quarter of 2012 were $17.7 million, which
    included $16.2 of net U.S. Feraheme product revenues. As a result of
    actions taken earlier this year to improve the pricing dynamics for
    Feraheme, net revenue realized per gram of Feraheme increased in the third
    quarter of 2012 compared to the second quarter of 2012, reversing a
    historically downward trend.
  *Feraheme provider demand^1 for the third quarter of 2012 was approximately
    27,500 grams, an 11% increase over the third quarter of 2011, with growth
    continuing to outpace IV iron market growth. Feraheme gained share in the
    hematology and hospital segments, with demand in these segments growing at
    8% and 34%, respectively, compared to the third quarter of 2011.
  *The company reported positive data from the second phase III clinical
    trials of Feraheme for the treatment of iron deficiency anemia regardless
    of the underlying cause and plans to submit a supplemental new drug
    application to the U.S. Food and Drug Administration in the fourth quarter
    of 2012.
  *International expansion efforts for ferumoxytol are progressing as
    planned. The first shipment of ferumoxytol to support European launch of
    Rienso®, the brand name of ferumoxytol in Europe, occurred in the third
    quarter. Revenue from these sales has been deferred until the product has
    been sold to customers of Takeda Pharmaceuticals Company, Ltd., AMAG’s
    partner in the EU and Canada. Additionally, Feraheme was launched in
    Canada early in the fourth quarter, for which AMAG has received a $3
    million milestone payment, and today, Rienso was launched in Europe. The
    first commercial sale of Rienso in Europe, which is expected shortly,
    triggers a $15 million milestone payment from Takeda.

“We are pleased to report the results of our strong third quarter performance.
Our updated full-year 2012 financial guidance is a direct result of our
renewed focus on Feraheme sales growth and aggressive operating expense
management,” commented William Heiden, president and chief executive officer
of AMAG. “While I am pleased with thegrowth achieved in our U.S. Feraheme
business this year, I believe that we can do even better. Feraheme represents
a tremendous opportunity for AMAG and I want to ensure that we unlock its full
potential -- by maximizing the number of adult IDA patients with chronic
kidney disease who benefit from Feraheme today, and broadening that to all IDA
patients next year, should we gain regulatory approval of an expanded label.”

Heiden continued, “Additionally,we have extended the international reach of
Feraheme/Rienso with launches in Canada and Europe, we remain on-track for our
fourth quarter sNDA filing in the U.S. for our Feraheme label expansion
andare making progress in our search to acquire additional commercial
products.”

Third quarter and Nine Month 2012 Financial Results (unaudited)

Total revenues for the quarter ended September 30, 2012 were $17.7 million, as
compared to $17.6 million for the third quarter of 2011. For the nine months
ended September 30, 2012, AMAG reported total revenues of $64.2 million, as
compared to revenues of $46.3 million for the same period in 2011. The
increase in total revenues for the nine-month period ended September 30, 2012
was due to increased physician demand for Feraheme and the recognition of a
$15 million milestone payment from Takeda in 2012.

Net U.S. Feraheme product revenues for the third quarter of 2012 were $16.2
million and include approximately $2.1 million in revenues associated with
changes in estimated Medicaid rebate and product returns reserves. These
reductions in estimated reserves reflect AMAG’s lower Medicaid claims and
product returns than originally recorded since launch in 2009. For comparison,
net U.S. Feraheme product revenues for the third quarter of 2011 were $15.6
million and included $3.0 million of revenues associated with a change in
estimated Medicaid reserves.

Total cost of goods sold (COGS) for the quarter ended September 30, 2012 were
$4.3 million, as compared to $2.7 million for the third quarter of 2011. Total
COGS for the nine months ended September 30, 2012 were $10.2 million, as
compared to $7.8 million for the same period in 2011. The increase in COGS for
the nine months ended September 30, 2012 is primarily due to a $0.7 million
increase in idle capacity charges and an additional $1.8 million in non-cash
charges related to the closure of the company’s Cambridge, MA manufacturing
facility.

Total operating expenses, excluding COGS, for the quarter ended September 30,
2012 were $18.0 million, as compared to $32.1 million for the third quarter of
2011. Total operating expenses, excluding COGS, for the nine months ended
September 30, 2012 were $67.5 million, as compared to $98.8 million for the
same period in 2011. The decreases in total operating expenses in the 2012
periods were due to decreased research and development costs associated with
the company’s global IDA registration program and decreased selling, general
and administrative expenses as the company realized the benefits of its
streamlined cost structure.

For the quarter ended September 30, 2012, the company’s net loss decreased 76%
to $4.0 million, or a loss of $0.19 per basic and diluted share, as compared
to a net loss of $16.6 million, or a loss of $0.78 per basic and diluted
share, for the third quarter of 2011. AMAG’s net loss for the nine months
ended September 30, 2012 was $13.1 million, or a loss of $0.61 per basic and
diluted share, as compared to a net loss of $58.5 million, or a loss of $2.76
per basic and diluted share for the same period in 2011.

Updated Annual 2012 Financial Guidance

The company is updating its 2012 full year financial guidance. AMAG now
expects:

  *Increased net Feraheme product revenue of $58 – $60 million, including the
    impact of changes in estimated reserves already recorded this year; and
  *Reduced total operating expenses, excluding COGS, of $87 – $90 million.

AMAG confirms prior annual 2012 guidance for the following:

  *COGS of approximately 20% – 24% of total product sales, which includes
    accelerated depreciation and idle capacity associated with the closure of
    the company’s manufacturing facility;
  *Cash milestones totaling $33 million associated with regulatory approvals
    and commercial launches in the EU and Canada, $18 million of which have
    already been received; and
  *A 2012 year-end cash and investments balance of $225 – $230 million, not
    including the impact of a business development transaction.

Conference Call and Webcast Access

AMAG Pharmaceuticals, Inc. will host a conference call and webcast with slides
today at 8:00 a.m. ET. To access the conference call via telephone, dial
877-412-6083 from the United States or 702-495-1202 for international access.
A telephone replay of the conference call will be available from approximately
12:00 p.m. ET on November 1, 2012 until midnight November 8, 2012. To access
the replay, dial 855-859-2056 from the United States or 404-537-3406 for
international access. The passcode for the live call and the telephone replay
is 37432497.

A live webcast of the conference call and accompanying slides will be
accessible through the Investors section of the company’s website at
www.amagpharma.com beginning today at 8:00 a.m. ET. Following the conference
call, the webcast replay will be available today at approximately 10:00 a.m.
ET and will be archived on the AMAG Pharmaceuticals, Inc. website until
midnight November 30, 2012.

About Feraheme

In the United States, Feraheme® (ferumoxytol) Injection for Intravenous (IV)
use is indicated for the treatment of iron deficiency anemia in adult chronic
kidney disease (CKD) patients. Feraheme received marketing approval from the
U.S. Food and Drug Administration on June 30, 2009 and was commercially
launched by AMAG in the U.S. shortly thereafter. Ferumoxytol received
marketing approval in Canada in December 2011, in the European Union in June
2012, and in Switzerland in August 2012. For additional product information,
please visit www.feraheme.com.

About AMAG Pharmaceuticals, Inc.

AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG),  a specialty pharmaceutical company
focused on the development and commercialization of an intravenous iron to
treat iron deficiency anemia (IDA). For additional company information, please
visit www.amagpharma.com.

AMAG Pharmaceuticals and Feraheme are registered trademarks of AMAG
Pharmaceuticals, Inc.

Rienso is a registered trademark of Takeda Pharmaceutical Company, Ltd.

^1IMS Health Data (in grams) through the period ending September 30, 2012.

                                                          
                                                                   
AMAG Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(unaudited, amounts in thousands, except for per share data)
                                        
                    Three Months Ended Sept        Nine Months Ended Sept 30,
                    30,
                      2012        2011           2012          2011    
Revenues:
Product sales,      $  16,176       $ 15,802       $ 44,304        $ 39,905
net
License fee,
collaboration         1,566       1,753          19,930        6,437   
and royalty
revenues
Total revenues        17,742      17,555         64,234        46,342  
                                                                   
Operating costs
and expenses
(1):
Cost of product        4,323        2,669            10,193          7,792
sales
Research and
development            5,260        14,894           25,393          45,155
expenses
Selling,
general and            12,160       17,230           40,442          53,690
administrative
expenses
Restructuring         562         -              1,620         -       
expense
Total operating
costs and             22,305      34,793         77,648        106,637 
expenses
                                                                   
Operating              (4,563 )     (17,238  )       (13,414 )       (60,295 )
income (loss)
                                                                   
Interest and
dividend               295          378              1,026           1,390
income, net
Other income          2           14             (1,469  )      (194    )
(expense)
Net income
(loss) before          (4,266 )     (16,846  )       (13,857 )       (59,099 )
income taxes
Income tax            299         215            793           611     
benefit
                                                                   
Net income          $  (3,967 )     $        )     $ (13,064 )     $ (58,488 )
(loss)                              (16,631
                                                                   
Net income
(loss) per          $  (0.19  )     $ (0.78  )     $ (0.61   )     $ (2.76   )
share - basic
and diluted
Weighted
average shares
outstanding
used to compute
net loss per
share:
Basic and              21,403       21,194           21,374          21,169
diluted
                                                                   
(1) Stock-based
compensation
included in
operating costs
and expenses:
Cost of product     $  52           $ 131          $ 198           $ 483
sales
Research and           473          84               1,420           1,365
development
Selling,
general and            1,525        1,487            3,694           6,950
administrative

                                                        
                                                             
AMAG Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(unaudited, amounts in thousands)
                                                             
                                      September 30, 2012     December 31, 2011
Cash and cash equivalents             $      42,900          $     63,474
Short-term investments                       167,943               148,703
Accounts receivable                          7,363                 5,932
Inventories                                  12,227                15,206
Receivable from collaboration                777                   428
Assets held for sale                         2,300                 -
Other current assets                        7,627                6,288
Total current assets                         241,137               240,031
                                                             
Net property, plant & equipment              3,411                 9,206
Long-term investments                        -                     17,527
Other assets                                460                  460
                                                             
Total assets                          $      245,008         $     267,224
                                                             
Accounts payable                      $      3,620           $     3,732
Accrued expenses and other                   16,674                28,916
short-term liabilities
Deferred revenues                           7,250                6,346
Total current liabilities                    27,544                38,994
                                                             
Deferred revenues                            40,624                45,196
Other long-term liabilities                 2,136                2,438
Total long-term liabilities                  42,760                47,634
                                                             
Total stockholders’ equity                  174,704              180,596
                                                             
Total liabilities and                 $      245,008         $     267,224
stockholders’ equity

Forward-looking Statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 and other federal
securities laws. Any statements contained herein which do not describe
historical facts, including but not limited to, our belief that “we can do
better,” our expectation to submit a supplemental new drug application to the
U.S. Food and Drug Administration by the end of 2012, our progress in our
search to acquire additional products and our expected financial results for
the 2012 fiscal year, 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: (1) uncertainties regarding our and
Takeda’s ability to successfully compete in the intravenous iron replacement
market both in the U.S. and outside the U.S., (2) uncertainties regarding our
ability to successfully and timely complete our clinical development programs
and obtain regulatory approval for Feraheme in the broader IDA indication and
in territories outside of the U.S., including the European Union, (3) the
possibility that significant safety or drug interaction problems could arise
with respect to Feraheme, (4) uncertainties regarding the ability to
manufacture Feraheme, (5) uncertainties relating to our patents and
proprietary rights, (6) uncertainty regarding our ability to acquire
additional products for our portfolio, and (7) other risks identified in our
Securities and Exchange Commission filings, including our Quarterly Report on
Form 10-Q for the quarter ended June 30, 2012. We caution you not to place
undue reliance on any forward-looking statements, which speak only as of the
date they are made.

We disclaim 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.

Contact:

AMAG Pharmaceuticals, Inc.
Amy Sullivan, 617-498-3303
 
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