AMAG Pharmaceuticals Announces Second Quarter 2020 Financial Results and Provides Corporate Update
- Financial guidance reissued to include EBITDA-positive projection for second-half 2020
- Strategic shift and momentum build through recent business development activities
- Brian Piekos promoted to Chief Financial Officer
- Conference call scheduled for 8:00 a.m. ET today
WALTHAM, Mass., Aug. 06, 2020 (GLOBE NEWSWIRE) -- AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) today reported unaudited consolidated financial results for the second quarter ended June 30, 2020. The company reported total revenues for the second quarter of 2020 of $52.8 million, including revenue of $29.6 million from Feraheme® (ferumoxytol injection) and revenue of $22.3 million from Makena® (hydroxyprogesterone caproate injection). The company also reported an operating loss of $7.0 million and an adjusted EBITDA loss of $1.7 million in the second quarter of 2020.1
"Amidst the unprecedented uncertainty that COVID-19 placed on the healthcare system and our economy, AMAG's marketed therapeutics performed well in the second quarter due in part to our teams' ability to adapt in a rapidly-changing environment," said Scott Myers, AMAG's Chief Executive Officer. "Over the past three months, we have advanced the company's strategic evolution by reaching important milestones that include a strategic, ex-US partnership with Norgine to further progress ciraparantag and strengthen our company's ability to invest in our pipeline. We have also streamlined expenses by completing the divestment of Intrarosa® and Vyleesi® and making changes to our portfolio designed to further focus on programs with the highest potential to deliver innovative treatments for patients and unlock shareholder value."
2020 FINANCIAL GUIDANCE
|($M)||2020 Financial Guidance2|
|Total revenue||$225 - $255|
|Operating loss||$(40) - $(15)|
|Non-GAAP Adjusted EBITDA3||$(5) - $20|
"Strong execution across our portfolio throughout the COVID-19 pandemic allows us to reissue financial guidance that reflects the relative stability of Makena over the quarter and the momentum that Feraheme began to build in June, which saw record highs in monthly share and ex-factory volume," said Brian Piekos, Chief Financial Officer. "The guidance we are sharing today is designed to prioritize investments that will drive long-term growth while also putting us on track to return to positive adjusted EBITDA."
Ciraparantag (AMAG-977) – As previously announced, AMAG has completed an exclusive licensing agreement with Norgine, a leading European specialist pharmaceutical company, to develop and commercialize ciraparantag in Europe, Australia and New Zealand. Through this agreement, AMAG has received a total of $30 million in upfront consideration and could receive up to $260 million in future contingent development and commercial milestones4 together with escalating double-digit royalties. Additionally, Norgine has committed to contribute one-third of the costs of the Phase 3 clinical program, which would be conducted by AMAG to support regulatory approval of ciraparantag by the U.S. Food and Drug Administration, the European Medicines Agency, and the Medicines and Healthcare Products Regulatory Agency. AMAG will continue to oversee the Phase 3 clinical program, while working closely with Norgine to develop and execute a global development strategy. The company believes this partnership will unlock value in ciraparantag and further strengthen AMAG’s ability to continue investing in innovative therapies that address urgent unmet medical needs.
On July 12, AMAG presented a poster of data titled “Efficacy and Safety of Ciraparantag in Reversing Apixaban and Rivaroxaban in Healthy Adults” at the 2020 International Society on Thrombosis and Haemostatis (ISTH) virtual annual meeting. This presentation shared data from two Phase 2 randomized, placebo-controlled, dose ranging studies which showed safety and efficacy of ciraparantag reversing the effects of apixaban and rivaroxaban in healthy adults age 50-75 years. Results from both studies, which randomized a total of 113 subjects, showed that steady-state anticoagulation induced by apixaban or rivaroxaban was reversed by a single IV infusion of ciraparantag in a dose-related manner as assessed by whole blood clotting time (WBCT).
AMAG-423 – The AMAG-423 Phase 2b/3a study was designed to explore a potential treatment for severe preeclampsia, a serious medical condition that impacts about 50,000 women in the US each year. As previously disclosed, the small population of eligible patients made the study difficult to enroll. The COVID-19 pandemic has led to a global pause for various clinical research projects across therapeutic areas, including the AMAG-423 Phase 2b/3a study. In light of these extended and ongoing delays to study completion, AMAG decided to conduct an interim analysis with data from 55 subjects to validate original study assumptions that were based on the 51-subject proof-of-concept DEEP study completed in 2007. In order to continue keeping AMAG blinded to study treatment assignments, the independent Data and Safety Monitoring Board (DSMB) was tasked with conducting the interim analysis.
Following this interim analysis, the DSMB provided a unanimous recommendation to stop the study, based upon the low likelihood that future enrollment would demonstrate a benefit of AMAG-423 in women with severe preeclampsia. Importantly, there were no safety concerns raised during this study. AMAG has accepted the DSMB’s recommendation to stop the study and is currently focused on ensuring an appropriate closeout of the study in partnership with investigators and other relevant stakeholders.
Divestiture of Intrarosa® and Vyleesi® – As previously announced, AMAG has completed the divestment of Intrarosa® and Vyleesi® which reduces operating expenses and allows the company to focus on optimizing its marketed assets and developing its innovative pipeline.
Leadership Appointments - The company has appointed Brian Piekos as its Chief Financial Officer, effective as of August 13, 2020. Mr. Piekos has served as interim CFO since June 2020 after holding several senior management positions since joining AMAG in 2015.
SECOND QUARTER ENDED JUNE 30
Second quarter revenue totaled $52.8 million, compared to $77.8 million for the same period in 2019. This decrease was due to the negative impact of COVID-19 and the October 2019 unfavorable FDA Advisory Committee recommendation on Makena.
- Feraheme achieved second quarter revenue of $29.6 million, a decrease of 30 percent over the same period last year. Feraheme’s average quarterly market share was 17.3 percent in the second quarter of 2020, compared to 17.2 percent in the second quarter of 2019.
- Makena second quarter revenue totaled $22.3 million, a decrease of 27 percent over the same period last year. Makena’s average quarterly market share was 66 percent in the second quarter of 2020, compared to 63 percent in the second quarter of 2019.
|($M)||Three Months Ended June 30,|
Total costs and expenses decreased by $134.2 million to $59.8 million in the second quarter of 2020, as compared to the second quarter of 2019.
- Cost of products sales in the second quarter of 2020 decreased by $6.1 million, as compared with the second quarter of last year. Direct cost of product sales for the three months ended June 30, 2019 included a $4.8 million one-time inventory write-down related to the Makena IM product. Excluding this one-time inventory write-down, direct cost of product sales declined in the second quarter of 2020 due to reduced Feraheme and Makena sales and the divestment of Intrarosa.
- Research and development (R&D) expenses totaled $8.3 million, compared to $15.0 million in the first quarter of last year. This decrease was primarily related to lower costs for Vyleesi following FDA approval in 2019 and COVID-19 related delays in clinical trials.
- Selling, general and administrative (SG&A) expenses decreased by approximately $37.8 million, or 49 percent, in the second quarter of 2020, compared to the same period in 2019. This decrease was primarily due to decreases in marketing spend related to women’s health assets and reduced compensation-related costs as a result of the May 2020 restructuring.
|($M)||Three Months Ended June 30,|
|Amortization of intangible assets||$9.0||$3.9|
|Direct cost of product sales||9.2||20.3|
|Total cost of product sales||18.2||24.2|
|Research and development expenses||8.3||15.0|
|Selling, general and administrative expenses||39.6||77.3|
|Impairment of intangible assets||—||77.4|
|Gain on sale of assets||(14.4||)||—|
|Total costs and expenses||$59.8||$194.0|
Operating Loss and Adjusted EBITDA
- The company reported an operating loss of $7.0 million in the second quarter of 2020, compared to an operating loss of $116.2 million in the same period last year.
- The company reported a loss in adjusted EBITDA of $1.7 million in the second quarter of 2020, compared to a loss in adjusted EBITDA of $24.7 million in the same period last year.
|($M)||Three Months Ended June 30,|
|Non-GAAP adjusted EBITDA5||$(1.7||)||$(24.7||)|
The financial figures and statements referenced herein have been adjusted to correct immaterial errors in Makena revenue in the historical periods 2016 through the first quarter of 2020; in aggregate, Makena revenue is reduced by $6.3 million over the four-year period. This error was identified by the company during the second quarter of 2020 and relates to the timely accrual of certain governmental rebates. The company and our independent auditors are still reviewing the prior period financial statements and the potential impact on our internal controls over financial reporting for the periods. Therefore, the financials set forth in this release are preliminary and may be updated in the company’s quarterly report on Form 10Q for the quarter ended June 30, 2020. As a result, investors are cautioned not to place undue reliance on these financial statements.
CONFERENCE CALL AND WEBCAST ACCESS
AMAG Pharmaceuticals, Inc. will host a conference call and webcast today at 8:00 a.m. ET to discuss the company's second quarter 2020 financial results and recent business updates.
U.S./Canada Dial-in Number: (877) 412-6083
International Dial-in Number: (702) 495-1202
Conference ID: 4548238
Replay Dial-in Number: (855) 859-2056
Replay International Dial-in Number: (404) 537-3406
Conference ID: 4548238
A telephone replay will be available from approximately 11:00 a.m. ET on August 6, 2020 through midnight on August 20, 2020
The webcast with slides will be accessible through the Investors section of the company’s website at www.amagpharma.com. A replay of the webcast will be archived on the website for 30 days.
USE OF NON-GAAP FINANCIAL MEASURES
AMAG has presented certain non-GAAP financial measures, including non-GAAP costs and expenses, non-GAAP adjusted EBITDA (earnings before income taxes, depreciation and amortization) and non-GAAP diluted shares outstanding. These non-GAAP financial measures exclude certain amounts, 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 accompanying this press release after the unaudited condensed consolidated financial statements.
1 See reconciliations of GAAP to non-GAAP adjustments at the conclusion of this press release
2 2020 Operating Loss financial guidance excludes the accounting impact of the following subsequent events announced in July: termination of the Vyleesi license agreement with Palatin and costs associated with discontinuing the AMAG-423 program.
3 See reconciliations of 2020 GAAP to non-GAAP financial guidance at the conclusion of this press release.
4 40.0 million of such milestones would be paid to the former equity holders of Perosphere Pharmaceuticals Inc. pursuant to the Agreement and Plan of Merger with Perosphere.
5 See reconciliations of GAAP to non-GAAP adjustments at the conclusion of this press release.
AMAG is a commercial stage biopharmaceutical company focused on bringing innovative products to patients with unmet medical needs. The company does this by leveraging its development and commercial expertise to invest in and grow its pharmaceutical products across a range of therapeutic areas. For additional company information, please visit www.amagpharma.com.
This press release contains forward-looking information about AMAG Pharmaceuticals, Inc. 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, among others, statements regarding the performance of AMAG’s marketed therapeutics, including about the stability of Makena and the momentum of Feraheme through the COVID-19 pandemic; beliefs about the team’s adaptability, the benefits of and expectations for recent business milestones, AMAG’s current pipeline and AMAG’s ability to invest in such pipeline; plans to deliver innovative treatments and unlock shareholder value; beliefs regarding the impact, including on a go-forward basis, of the COVID-19 pandemic on AMAG’s revenues, results of operations and overall business and industry; expectations for the Norgine arrangement, including the ability to unlock value in ciraparantag and invest in innovative therapies; beliefs about AMAG-423; plans to use streamlined operations and to optimize its pipeline; statements regarding 2020 financial guidance, including the expectation of achieving EBITDA positive and the impact of recent events on such guidance, such as the termination of the Palatin license agreement and costs associated with discontinuing the AMAG-423 trial, and statements about AMAG’s ability to deliver long-term growth are based on management’s current expectations and beliefs and 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, among others, risks and uncertainties related to the scale and scope of the COVID-19 pandemic and its impact on AMAG’s revenues and operations, including clinical trials, as well as COVID-19’s impact on AMAG’s business partners, healthcare providers, patients, employees and the health care industry and worldwide economies generally, risks related to AMAG’s ability to manage the recently streamlined business and achieve anticipated results in a timely manner or at all, including any unintended consequences from such efforts; the possibility that AMAG’s independent auditors will identify a material weakness as part of their review stemming from the immaterial accounting errors, or that they will identify other errors or corrections, including errors or corrections that could materially impact our financial statements and results provided in this press release; the accounting impact of AMAG’s recent business development activity could have an impact on 2020 guidance; revenue expectations and estimates may be inaccurate, including as a result of regulatory action with respect to Makena or due to COVID-19, AMAG may not successfully develop and obtain approval for ciraparantag or may face challenges in supporting its relationship with Norgine, as well as those risks identified in AMAG’s filings with the U.S. Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K for the year ended December 31, 2019, its Current Reports on Form 8-K, its Quarterly Reports on Form 10-Q, including for the quarter ended March 31, 2020, and in any subsequent filings with the SEC, including AMAG’s upcoming Form 10-Q for the quarter ended June 30, 2020 , which are available at the SEC’s website at www.sec.gov. Any such risks and uncertainties could materially and adversely affect AMAG’s results of operations, its profitability and its cash flows, which would, in turn, have a significant and adverse impact on AMAG’s stock price. AMAG cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made.
AMAG disclaims 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.
AMAG Pharmaceuticals®, the logo and designs, and Feraheme® are registered trademarks of AMAG Pharmaceuticals, Inc. Makena® is a registered trademark of AMAG Pharma USA, Inc. Any other trademarks referred to in this report are the property of their respective owners.