AMAG Pharma's (AMAG) Q3 Earnings Beat, Lowers '17 Outlook

AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) posted adjusted earnings of $1.57 per share in the third quarter of 2017 compared with 47 cents in the year-ago quarter. The reported earnings compared favorably with the Zacks Consensus Estimate of a loss of 4 cents. Notably, the figure included the income tax benefit gained in the quarter.

Quarterly revenues came in at $153.7 million, up approximately 7% from $143.8 million in the year-ago quarter, driven by sales growth across the product portfolio. However, the top line missed the Zacks Consensus Estimate of $167 million.

Markedly, shares of AMAG have declined 63.2% year to date, as against the industry’s gain of 2.3%.

Quarter in Detail

Makena sales came in at $97.6 million, up 5% year over year. However, the same declined on a sequential basis. The sequential decline was due to a reduction in inventory related to a late second-quarter inventory build as well as slower growth in demand, partly owing to the adverse impact of the hurricanes in Florida and Texas.

Combined sales of Feraheme and MuGard amounted to $26.3 million, up 17.6%. During the quarter, service revenues from Cord Blood Registry (CBR) came in at $29.4 million, 5.2% higher than $27.9 million in the year-ago quarter.

Adjusted total costs and expenses increased to $134.2 million in the quarter from $105.0 million in the year-ago quarter. These costs excluded Makena-related non-cash impairment charge of $319.2 million during the third quarter, which were partially offset by an adjustment to contingent consideration of $49.9 million.

Key Developments

In the reported quarter, the company launched Intrarosa, which is the first and only FDA-approved local non-estrogen product for the treatment of moderate-to-severe dyspareunia (pain during intercourse), a symptom of vulvar and vaginal atrophy (VVA) due to menopause.

Notably, the company received FDA acceptance for review of the Feraheme submission to expand the current label to include the treatment of all adults with iron deficiency anemia (IDA) with an action date of Feb 2, 2018.

Also, AMAG held a productive pre-new drug application (NDA) meeting with the FDA and expects to submit the NDA for bremelanotide in the first quarter of 2018.

2017 Outlook

AMAG lowered its total revenue guidance for 2017. Total revenues are expected to be in the range of $601-$633 million, down from its prior expectation of $630-$690 million.

Moreover, the company expects Makena revenues to be in the band of $385 million to $395 million compared with the previous guidance of $410 million to $440 million. In the fourth quarter of 2017, it expects sales of Makena to be lower than previously expected due to the continued impact of the reduced number of patients initiating therapy in the third quarter.

Sales expectations for Feraheme and MuGard were reiterated at $100 million to $110 million. The company also reaffirmed its outlook for the CBR Segment in the range of $115 million to $125 million.

Zacks Rank & Stocks to Consider

AMAG carries a Zacks Rank #3 (Hold). Some better-ranked health care stocks in the same space include Ligand Pharmaceuticals Incorporated (NASDAQ:LGND) , Agenus Inc. (NASDAQ:AGEN) and Adaptimmune Therapeutics plc (NASDAQ:ADAP) . While Ligand sports a Zacks Rank #1 (Strong Buy), Agenus and Adaptimmune carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates have moved up $3.68 to $3.70 for 2018 over the last 30 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 6.19%. The share price of the company has increased 42.8% year to date.

Agenus’ loss per share estimates have narrowed from $1.40 to $1.36 for 2018 over the last 30 days. The company delivered positive earnings surprises in three of the trailing four quarters, with an average beat of 4.27%.

Adaptimmune’s loss per share estimates have narrowed from $1.03 to 95 cents for 2017 and from 95 cents to 90 cents for 2018 over the last 60 days. The company came up with positive earnings surprises in two of the trailing four quarters, with an average beat of 2.56%. The share price of the company has increased 94% year to date.

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