AMAG Announces Fourth Quarter and Year End 2012 Financial Results

  AMAG Announces Fourth Quarter and Year End 2012 Financial Results

                   Increased total revenue by 39% over 2011

                 Reduced operating expenses by 32% over 2011

                      Reduced net loss by 79% over 2011

Business Wire

LEXINGTON, Mass. -- March 1, 2013

AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG), a specialty pharmaceutical company,
today reported unaudited consolidated financial results for the fourth quarter
and year ended December 31, 2012. Total revenues for 2012 were 39% greater
than 2011, driven by the recognition of milestone payments received from
Takeda Pharmaceutical Company Limited, the company’s ex-US commercial partner,
and increased Feraheme® (ferumoxytol) sales. As of December 31, 2012, the
company’s cash, cash equivalents and investments totaled approximately $227
million.

2012 Highlights

  *The company reported an increase in U.S. Feraheme net product sales,
    driven by increased utilization of Feraheme for the treatment of iron
    deficiency anemia (IDA) in chronic kidney disease (CKD) patients. Total
    Feraheme provider demand for 2012 was approximately 110,000 grams,
    representing a 17% increase in provider demand over 2011. Feraheme
    provider demand for the fourth quarter of 2012 was approximately 27,500
    grams, approximately 14% higher than the fourth quarter of 2011.^1
  *The company made significant progress expanding the geographic reach of
    ferumoxytol, with approvals for use in adult IDA patients with CKD in the
    European Union (EU), Canada and Switzerland. Takeda has commercial rights
    to ferumoxytol in these regions, where they launched commercially in the
    fourth quarter of 2012. In the EU and Switzerland, Takeda launched under
    the trade name Rienso®; in Canada, Takeda launched under the trade name
    Feraheme. During 2012, AMAG received $33 million in milestone payments
    from Takeda related to the approvals and launches of Feraheme/Rienso in
    Europe and Canada.
  *AMAG also made meaningful progress in its efforts to expand the label for
    Feraheme. The company completed a 1,400 patient, phase III registration
    program for ferumoxytol in adult IDA patients, regardless of the
    underlying cause of their anemia. The program was comprised of two phase
    III trials, both of which achieved their respective primary and secondary
    endpoints (with high statistical significance). AMAG submitted a
    supplemental new drug application (sNDA) with the U.S. Food and Drug
    Administration (FDA) in December 2012 seeking to expand the indication for
    Feraheme beyond the current CKD indication to include all adult patients
    with IDA who have failed or otherwise cannot take oral iron therapy.

Fourth Quarter and Full Year 2012 Financial Results (unaudited)

Total revenues for the quarter ended December 31, 2012 were $21.1 million, as
compared to $14.9 million for the same period in 2011. Total revenues for the
year ended December 31, 2012 were $85.4 million as compared to $61.2 million
for the year ended December 31, 2011. The increase in total revenues in 2012
was due to increases in both product sales and milestone payments recognized
in 2012. Net U.S. Feraheme product sales for the quarter ended December 31,
2012 were $14.4 million, as compared to $12.8 million of net U.S. Feraheme
product sales for the same period in 2011. Net U.S. Feraheme product sales for
the year ended December 31, 2012 were $58.3 million, as compared to $52.1
million for 2011.

Cost of goods sold (COGS) in 2012 were $14.2 million, or 24% of U.S. net
product sales, compared to $10.5 million, or 20% of U.S. net product sales, in
2011. The increase in 2012 was attributable to several one-time charges
associated with the closure of our Cambridge, MA manufacturing facility and
the move to an outsourced manufacturing supply chain.

Excluding COGS, total operating expenses for the year ended December 31, 2012
were $88.6 million, as compared to $130.5 million for 2011. The decrease in
operating costs in 2012 versus 2011 was primarily attributable to lower
research and development expenses due to the completion of the phase III IDA
program and lower selling, general and administrative expenses due primarily
to lower promotional expenses and the realignment of the company’s sales
force.

The company reported a net loss of $3.7 million, or a loss of $0.17 per share,
for the quarter ended December 31, 2012, as compared to a net loss of $18.6
million, or a loss of $0.87 per share, for the year ended December 31, 2011.
Net loss for the year ended December 31, 2012 was $16.8 million, or a loss of
$0.78 per share, as compared to a net loss of $77.1 million, or a loss of
$3.64 per share for the same period in 2011.

“In 2012, we took actions to stabilize our business – such as stopping the
historical decline of our average net revenues per gram,” stated William
Heiden, president and chief executive officer of AMAG. “We then turned our
focus to putting Feraheme on a solid growth trajectory, achieving 12 percent
dollar growth for the year, while reducing expenses by more than 30 percent as
compared to 2011. Our goals for 2013 are clear, to continue to drive growth of
Feraheme while we prepare for the potential launch in the broader IDA
indication, expand our product portfolio and continue the disciplined
management of our expenses.”

2013 Goals

AMAG intends to achieve the following in 2013:

  *Achieve double-digit growth of Feraheme revenues, driven by both volume
    (gram) growth in the CKD patient population and increases in our realized
    net revenue per gram of Feraheme sold;
  *Complete all pre-launch activities to ensure that the company is prepared
    for the potential launch of Feraheme in the broader IDA patient
    population, pending regulatory approval later this year;
  *Support a timely FDA review of the company’s sNDA for Feraheme in the
    treatment of IDA in adult patients, regardless of underlying cause, who
    fail or otherwise cannot take oral iron;
  *Work closely with Takeda to ensure a timely submission of an equivalent
    label expansion filing in the EU, as well as supporting similar
    submissions in other Takeda geographies;
  *Expand the company’s product portfolio through the execution of an
    acquisition or in-license of commercial-stage specialty pharmaceutical
    product(s); and
  *Deliver on the company’s 2013 annual financial guidance.

2013 Financial Outlook

The company reiterates the following guidance for 2013:

  *Total revenues of between $73 million and $77 million, including:

       *Feraheme U.S. net product sales of between $63 million and $67
         million;
       *Revenue from royalties, ex-U.S. product sales and milestones of
         approximately $10 million;

  *COGS of between 14% and 18% of net Feraheme product sales;
  *Total operating expenses of between $78 million and $82 million,
    including:

       *Research and development expenses of between $24 million and $27
         million, and
       *Selling, general and administrative expenses of between $54 million
         and $57 million; and

  *A 2013 year-end cash and investments balance of between $206 million and
    $211 million, not including the impact of business development
    transactions.

About Iron Deficiency Anemia

More than 4 million Americans have IDA; 1.6 million of whom are estimated to
have CKD, while the other 2.4 million suffer from anemia due to other
causes.^2 For these patients with anemia due to other causes, the underlying
diseases or issues causing IDA include abnormal uterine bleeding,
gastrointestinal disorders, inflammatory diseases and chemotherapy-induced
anemia. Many IDA patients fail treatment with oral iron due to intolerability
or side effects.^3

About AMAG

AMAG Pharmaceuticals, Inc. is a specialty pharmaceutical company that
manufactures and markets Feraheme® (ferumoxytol) Injection for Intravenous
(IV) use in the United States. Along with driving organic growth of its lead
product, AMAG intends to expand its portfolio with additional commercial-stage
specialty pharmaceuticals. The company is seeking complementary products that
leverage the company’s commercial footprint and focus on hematology and
oncology centers and hospital infusion centers. 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 Limited.


AMAG Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(unaudited, amounts in thousands, except for per share data)
                                                          
                    Three Months Ended Dec.        Twelve Months Ended Dec.
                    31,                            31,
                     2012         2011          2012          2011    
Revenues:
U.S. product        $ 14,381       $ 12,830        $ 58,287        $ 52,097
sales, net
International
product sales         120            -               120             -
and royalties
License fee and
other                 6,564          1,999           26,475          8,321
collaboration
revenues
Other product
sales and            79           78            496           831     
royalties
Total revenues       21,144       14,907        85,378        61,249  


Operating costs
and expenses
(1):
Cost of product       4,027          2,739           14,220          10,531
sales
Research and
development           7,903          12,985          33,296          58,140
expenses
Selling,
general and           12,629         15,173          53,071          68,863
administrative
expenses
Restructuring        595          3,508         2,215         3,508   
expenses
Total operating
costs and            25,154       34,405        102,802       141,042 
expenses
                                                                             
Operating Loss        (4,010 )       (19,498 )       (17,424 )       (79,793 )
                                                                             
Interest and
dividend              260            357             1,286           1,747
income, net
Other income         3            1             (1,466  )      (193    )
(expense)
Net loss before       (3,747 )       (19,140 )       (17,604 )       (78,239 )
income taxes
Income tax           61           559           854           1,170   
benefit
                                                                             
Net loss            $ (3,686 )     $ (18,581 )     $ (16,750 )     $ (77,069 )
                                                                             
Net loss per
share - basic       $ (0.17  )     $ (0.87   )     $ (0.78   )     $ (3.64   )
and diluted:
                                                                   
Weighted
average shares
outstanding
used to compute
net loss per
share:
Basic and             21,446         21,248          21,392          21,189
diluted
                                                                   
(1) Stock-based
compensation
included in
operating costs
and expenses:
Cost of product     $ 27           $ 133           $ 225           $ 616
sales
Research and          574            509             1,994           1,874
development
Selling,
general and           1,111          598             4,805           7,548
administrative

                                                        
AMAG Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(unaudited, amounts in thousands)
                                                             
                                       December 31, 2012     December 31, 2011
Cash and cash equivalents              $     46,293          $     63,474
Short-term investments                       180,750               148,703
Accounts receivable                          6,410                 5,932
Inventories                                  12,451                15,206
Receivable from collaboration                263                   428
Assets held for sale                         2,000                 -
Other current assets                        6,213                6,288
Total current assets                         254,380               240,031
                                                                   
Net property, plant & equipment              3,297                 9,206
Long-term investments                        -                     17,527
Other assets                                460                  460
Total assets                           $     258,137         $     267,224

Accounts payable                       $     3,515           $     3,732
Accrued expenses and other                   20,338                28,916
short-term liabilities
Deferred revenues - short term              9,104                6,346
Total current liabilities                    32,957                38,994
                                                                   
Deferred revenues - long term                50,350                45,196
Other long term liabilities                 2,033                2,438
Total long term liabilities                  52,383                47,634
                                                                   

                                            172,797              180,596
Total stockholders’ equity
                                                                   
Total liabilities and                  $     258,137         $     267,224
stockholders’ equity

About Feraheme® (ferumoxytol)/Rienso

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, where it is marketed by Takeda
as Feraheme, and in the European Union in June 2012 and Switzerland in August
2012, where it is marketed by Takeda as Rienso®. For additional product
information, please visit www.feraheme.com.

Feraheme ® (ferumoxytol) Injection for Intravenous (IV) is indicated for the
treatment of iron deficiency anemia in adult patients with chronic kidney
disease. Feraheme is contraindicated in patients with known hypersensitivity
to Feraheme or any of its components.

Serious hypersensitivity reactions, including anaphylactic-type reactions,
some of which have been life-threatening and fatal, have been reported in
patients receiving Feraheme. Serious adverse reactions of clinically
significant hypotension have been reported. In the post-marketing setting,
life-threatening anaphylactic type reactions, cardiac/cardiorespiratory
arrest, clinically significant hypotension, syncope, unresponsiveness and
other safety events have been reported in patients being treated with
Feraheme. In clinical trials, the most commonly occurring adverse reactions
for Feraheme-treated patients were nausea, dizziness, hypotension, peripheral
edema, headache, edema and vomiting. A full list of adverse events can be
found in the full prescribing information for Feraheme.

For full prescribing information, please visit www.feraheme.com.

Forward-looking Statement

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, the market for Feraheme and
our future profitability; the management of our operating expenses and cost of
goods sold; our efforts and expectations regarding the review and possible
approval of our supplemental new drug application for Feraheme; regulatory
filings to be submitted by Takeda outside of the U.S.; our expectations for
revenue growth and plans for strategic investments, including the acquisition
or in-license of commercial-stage specialty pharmaceutical product(s); our
expectations regarding the potential patient population for Feraheme and the
effective price per gram for Feraheme; delivery of financial guidance; our
expected 2013 Feraheme product revenue; our expected 2013 operating expenses
and cost of goods sold; our expected 2013 year-end cash and investments
balance; potential Feraheme milestone or royalty payments; and our plans to
expand the reach of Feraheme to new indications and geographic territories 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 US and outside the US, including the EU, (2) uncertainties
regarding our ability to successfully and timely complete our clinical
development programs and obtain regulatory approval for Feraheme/Rienso in the
broader IDA indication both in the US and outside of the US, including the EU,
(3) the possibility that significant safety or drug interaction problems could
arise with respect to Feraheme/Rienso, (4) uncertainties regarding the
manufacture of Feraheme/Rienso, (5) uncertainties relating to our patents and
proprietary rights, both in the US and outside of the US, (6) the risk of an
Abbreviated New Drug Application (ANDA) filing following the FDA’s recently
published draft bioequivalence recommendation for ferumoxytol, and (7) other
risks identified in our Securities and Exchange Commission filings, including
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 and
subsequent filings with the SEC. 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.

^1 IMS Health

^2 U.S. Census; U.S. Renal Data System, USRDS 2010 Annual Data Report: Atlas
of Chronic Kidney Disease and End-Stage Renal Disease in the United States,
National Institutes of Health, National Institute of Diabetes and Digestive
and Kidney Diseases, Bethesda, MD, 2010: 41-42; Fishbane, S. et al. Iron
Indices in CKD in the NHANES 1998-2004. Clin J Am Soc Nephrol.2009
January;4(1): 57–61.

^3 Barton, James et al. Intravenous iron dextran therapy in patients with iron
deficiency and normal renal function who failed to respond to or did not
tolerate oral iron supplementation. Am J Medicine. 2000; 109: 27-32.

Contact:

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