AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) a biopharmaceutical company focused on the development and commercialization of a therapeutic iron compound to treat iron deficiency anemia, today reported unaudited consolidated financial results for the fourth quarter and year ended December 31, 2011. As of December 31, 2011, the company's cash, cash equivalents and investments totaled approximately $230 million.
Business Update
- Total revenues for the year ended December 31, 2011 were $61.2 million, of which $52.1 million were net product revenues from Feraheme® (ferumoxytol) Injection for intravenous (IV) use. Feraheme net product revenues for the year included a $3.0 million favorable change in estimated Medicaid reserves to reflect AMAG's actual claims experience since launch, which the company recognized in the third quarter of 2011. For the fourth quarter, total revenues were $14.9 million, of which $12.8 million were Feraheme net product revenues.
- Total Feraheme provider demand for 2011 was approximately 92,000 grams, nearly all of which was for use in the non-dialysis setting for patients with chronic kidney disease (CKD), representing a 38% increase in non-dialysis provider demand over 2010. Feraheme non-dialysis provider demand for the fourth quarter of 2011 was approximately 16% percent higher than the fourth quarter of 2010.
- AMAG is continuing to work with Jefferies & Company, Inc. to identify and evaluate various strategies to enhance stockholder value, including a potential sale of the company, and leverage AMAG's core assets - Feraheme, AMAG's commercial and drug development infrastructure, and the company's cash balance.
"We are pleased with the progress that we are making in the strategic evaluation of our business and in our efforts to re-establish the growth of Feraheme in 2012," said Frank Thomas, chief operating officer and interim chief executive officer of AMAG. "As we work to enhance value for our stockholders, we must grow our top line while operating as a leaner, more nimble organization to preserve our financial strength. We believe that the key commercial initiatives being implemented by a new leadership team, coupled with the discipline to manage our business to cash flow breakeven this year, will position us for success on both fronts in 2012."
Fourth Quarter and Full Year 2011 Financial Results (unaudited)
Total revenues for the quarter ended December 31, 2011 were $14.9 million as compared to $17.2 million for the same period in 2010. Total revenues for the year ended December 31, 2011 were $61.2 million as compared to $66.2 million for the same period in 2010. The decreases in revenues in 2011 over the comparable 2010 periods were primarily attributable to the decline in the company's revenues from dialysis organizations largely as a result of the January 1, 2011 implementation of the new Medicare prospective payment system for end-stage renal disease patients, also known as the "bundle," offset, in part, by a $3.0 million favorable change in estimated Medicaid reserves.
Total operating costs and expenses for the quarter ended December 31, 2011 were $34.4 million as compared to $37.4 million for the same period in 2010. Total operating costs and expenses for the year ended December 31, 2011 were $141.0 million as compared to $149.2 million for the same period in 2010. The decrease in operating costs and expenses in 2011 versus 2010 was primarily due to a $16.1 million decrease in selling, general and administrative expenses, partially offset by increases in costs of goods sold and research and development expenses associated with the company's global IDA registration clinical program.
The company reported a net loss of $18.6 million, or a loss of $0.87 per share, for the quarter ended December 31, 2011, as compared to a net loss of $19.8 million, or a loss of $0.94 per share, for the same period in 2010. Net loss for the year ended December 31, 2011 was $77.1 million, or a loss of $3.64 per share, as compared to a net loss of $81.2 million, or a loss of $3.90 per share for the same period in 2010.
2012 Goals
AMAG expects to achieve the following in 2012:
- Increase the demand for Feraheme by >15%, as measured by grams sold through to non-dialysis sites of care for U.S. CKD patients, assuming a consistent growth rate for the overall IV iron market, continued Feraheme market share growth in the hematology/oncology and hospital segments, and maintenance of Feraheme's position as a market share leader in the non-dialysis nephrology segment;
- Receive a favorable decision on the company's marketing authorization application for Feraheme for the treatment of IDA in adult patients with CKD in Europe;
- Launch Feraheme, through our partner Takeda, in Europe and Canada; and
- File the sNDA in the United States for Feraheme for the broad iron deficiency anemia indication.
2012 Financial Guidance
The company reiterates its financial guidance to manage the business to achieve cash flow breakeven in 2012 based on the following guidance:
- Net Feraheme product revenues of $53 - $57 million based on the commercial goals outlined above, excluding any royalties from sales outside the U.S.;
- Milestones received totaling $33 million associated with potential regulatory approvals and commercial launches in the EU and Canada;
- Cost of goods sold (COGS) of approximately 14% - 18% of total product sales;
- Total operating expenses, excluding COGS, of $90 - $95 million, of which $40 - $45 million are expected to be research and development expenses and $50 - $55 million are expected to be selling, general and administrative expense; and
- A 2012 year-end cash and investments balance of $225 - $230 million.
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