AMAG Announces First Quarter 2013 Financial Results

  AMAG Announces First Quarter 2013 Financial Results

Total revenue increased 16%, operating expenses decreased 24%, resulting in a
                          69% reduction in net loss

                 Conference call scheduled for 4:30 EDT today

Business Wire

LEXINGTON, Mass. -- April 23, 2013

AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG), a specialty pharmaceutical company,
today reported unaudited consolidated financial results for the quarter ended
March 31, 2013. Total revenues for the first quarter of 2013 were $17.9
million, 16 percent greater than the first quarter of 2012, driven by
increased Feraheme® (ferumoxytol) U.S. sales. As of March 31, 2013, the
company’s cash, cash equivalents and investments totaled approximately $217
million.

“We have gotten off to a very strong start in 2013, delivering record results
through a combination of solid top-line growth and disciplined financial
management,” said William Heiden, president and chief executive officer of
AMAG. “In the first quarter, we achieved our largest volume of non-dialysis
Feraheme sales since launch. Our new chief commercial officer, Greg Madison,
and his team did an excellent job of driving Feraheme performance this
quarter, achieving especially strong growth in the largest segment of the
non-dialysis IV iron market, the hospital segment.”

Business Highlights

  *The company reported $15.6 million in U.S. Feraheme net product sales,
    compared to $13.1 million (excluding $0.5 million reduction of reserves
    for product returns) in the first quarter of 2012, representing a 19
    percent increase. The growth in U.S. product sales was driven by increased
    utilization of Feraheme for the treatment of iron deficiency anemia (IDA)
    in chronic kidney disease (CKD) patients and an increase in net revenue
    per gram of Feraheme. Total Feraheme provider demand for the first quarter
    of 2013 was approximately 29,500 grams, representing an 11 percent
    increase in provider demand over the first quarter of 2012.^1
  *Total operating expenses for the first quarter of 2013 declined 24 percent
    compared to the same period in 2012 as the company remains focused on
    driving the business towards profitability.
  *AMAG is beginning to see the positive financial impact of the change to a
    fully outsourced supply chain that occurred in the fourth quarter of 2012,
    with gross margin on sales of Feraheme increasing to more than 82 percent
    in the first quarter of 2013 driven by improvements in cost of goods sold
    (COGS).
  *In March 2013, AMAG received notification that its supplemental new drug
    application (sNDA) was accepted for review by the U.S. Food and Drug
    Administration (FDA) and that the FDA is targeting October 21, 2013 as the
    PDUFA action date for the filing. AMAG submitted the sNDA 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.
  *AMAG continues to prepare for the potential approval of its sNDA for
    Feraheme in patients with IDA, regardless of underlying cause, who cannot
    take oral iron. These activities include conducting physician market
    research and product message development and testing. Other related
    activities include corporate disease awareness initiatives and support for
    the presentations/publications of data from AMAG’s phase III IDA clinical
    program in medical journals and at medical conferences.

“We made several changes to the way we operate our business in 2012, and we
are now realizing the full benefit of those changes in our financial results,”
stated Frank Thomas, chief operating officer of AMAG. “The nineteen percent
increase in U.S. Feraheme sales versus 2012 was driven by strong volume gains
as well as an increase in net revenue per gram, each of which we accomplished
while maintaining a lower operating cost structure in the first quarter.”

First Quarter 2013 Financial Results (unaudited)

Total revenues for the quarter ended March 31, 2013 were $17.9 million, as
compared to $15.5 million for the same period in 2012. The increase in total
revenues in the first quarter of 2013 was primarily due to higher Feraheme
product sales. Net U.S. Feraheme product sales for the quarter ended March 31,
2013 were $15.6 million, as compared to $13.1 million (excluding a $0.5
million reduction of reserves for product returns) for the same period in
2012.

Feraheme COGS in the first quarter of 2013 were $2.8 million, or 18 percent of
global Feraheme product sales, compared to $2.6 million, or 23 percent of
Feraheme product sales (excluding $0.5 million reduction of reserves for
product returns) in the first quarter of 2012. Total operating expenses for
the quarter ended March 31, 2013 were $19.4 million, compared to $25.6 million
for the same period in 2012. The decrease in operating expenses in the first
quarter of 2013 versus the first quarter of 2012 was primarily attributable to
lower research and development expenses due to the 2012 completion of AMAG’s
phase III IDA clinical program and a leaner internal R&D cost structure.

The company reported a net loss of $3.9 million, or a loss of $0.18 per share,
for the quarter ended March 31, 2013, as compared to a net loss of $12.4
million, or a loss of $0.58 per share, for the same period in 2012.

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 percent and 18 percent of net Feraheme global product
    sales;
  *Total operating expenses of between $78 million and $82 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.

Conference Call and Webcast Access

AMAG Pharmaceuticals, Inc. will host a conference call and webcast with slides
today at 4:30 p.m. EDT, during which management will discuss the company’s
financial results, commercial progress and business development initiatives.
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 7:30 p.m. EDT on April 23, 2013
through midnight April 30, 2013. 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 37544923.

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 7:30  p.m. EDT on April 23, 2013 through
midnight May 23, 2013.

                                                        
AMAG Pharmaceuticals, Inc.
Condensed Consolidated Statements of Operations
(unaudited, amounts in thousands, except for per share data)
                                                             
                                          Three Months Ended March 31,
                                            2013              2012      
Revenues:
U.S. product sales, net                   $  15,578          $   13,626
International product sales and              63                  -
royalties
License fee and other collaboration          2,003               1,753
revenues
Other product sales and royalties           236               101       
Total revenues                              17,880            15,480    


Operating costs and expenses:
Cost of product sales                        2,942               2,646
Research and development expenses            5,404               12,462
Selling, general and administrative         14,005            13,181    
expenses
Total operating costs and expenses          22,351            28,289    
Operating loss                               (4,471   )          (12,809   )
Interest and dividend income, net            271                 393
Other income                                 6                   -
Gain on disposal of fixed assets            299               -         
Net loss                                  $  (3,895   )      $   (12,416   )
Net loss per share - basic and            $  (0.18    )      $   (0.58     )
diluted
                                                             
Weighted average shares outstanding
used to compute net loss per share:
Basic and diluted                           21,544            21,349    
                                                             
AMAG Pharmaceuticals, Inc.
Condensed Consolidated Balance Sheets
(unaudited, amounts in thousands)
                                                             
                                          March 31, 2013     December 31, 2012
Cash and cash equivalents                 $  33,845          $   46,293
Short-term investments                       183,224             180,750
Accounts receivable                          8,519               6,410
Inventories                                  11,292              12,451
Receivable from collaboration                108                 263
Assets held for sale                         1,931               2,000
Other current assets                        6,219             6,213     
Total current assets                         245,138             254,380
Net property, plant & equipment              2,670               3,297
Other assets                                460               460       
Total assets                              $  248,268        $   258,137   

Accounts payable                          $  2,325           $   3,515
Accrued expenses and other short-term        15,130              20,338
liabilities
Deferred revenues - short term              9,262             9,104     
Total current liabilities                    26,717              32,957
Deferred revenues - long term                48,376              50,350
Other long term liabilities                 1,922             2,033     
Total long term liabilities                  50,298              52,383
Total stockholders’ equity                  171,253           172,797   
Total liabilities and stockholders’       $  248,268        $   258,137   
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 March 2012, 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 revenues and profitability; our operating expenses and cost of
goods sold; expectations regarding the FDA’s review of our sNDA for Feraheme;
our expectations for revenue growth and the expanded indication for Feraheme;
AMAG’s pursuit of activities in preparation for the potential approval of our
sNDA; the impact of 2012 changes to our business; 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, and our
dependence on third parties for, 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 draft bioequivalence recommendation for
ferumoxytol, and (7) other risks identified in our Securities and Exchange
Commission filings, including our Annual Report on Form 10-K for the year
ended December 31, 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
 
Press spacebar to pause and continue. Press esc to stop.