The Medicines Company (MDCO) Q1 Loss Wider Than Expected

The Medicines Company (NASDAQ:MDCO) reported a loss of $1.44 per share in first quarter 2017, wider than the Zacks Consensus Estimate of a loss of $1.13.

Including share-based compensation expenses, however, adjusted loss was $1.14 per share. The reported figure widened from the year-ago loss of $1.13 per share.

So far this year, The Medicines Company’s shares significantly outperformed Zacks classified Medical-Biomedical and Genetics industry. The company’s shares gained 46.6% while the industry registered an increase of 4.7%.



Quarterly revenues plunged 51.9% year over year to $24.2 million. Reported revenues also missed the Zacks Consensus Estimate of $35 million. Net revenue for the quarter included royalty revenues of $10.4 million from the authorized generic sales of Angiomax by Novartis AG’ (NYSE:NVS) generic arm, Sandoz. Royalty revenues from Angiomax of $10.4 million were significantly lower than the year-ago figure of $18.9 million.

Quarter in Detail

Worldwide sales of Angiomax were $6.9 million during the reported quarter, substantially lower than the year-ago sales of $16.9 million. In the U.S., sales of the product plunged to $4.8 million from the year-ago figure of $13.2 million owing to the Jul 2015 loss of exclusivity.

Sales of other products like Minocin, Orbactiv, Ionsys and the recently divested non-core cardiovascular products were $7 million compared with the year-ago sales of $14.5 million.

Medicines Company’s research and development (R&D) expenses (including stock-based compensation expenses) shot up 18.7% year over year to $37.5 million due to higher spend in support of inclisiran.

Selling, general and administrative (SG&A) expenses (including stock-based compensation expenses) were down 34.1% to $49.3 million.

Pipeline Updates

In Nov last year, The Medicines Company and partner Alnylam Pharmaceuticals, Inc. (NASDAQ:ALNY) announced positive top-line results from a Day 180 interim analysis of the ongoing ORION-1 phase II study on its pipeline candidate, Inclisiran. The drug is being evaluated for the treatment of hypercholesterolemia. Final results were presented at American College of Cardiology’s on Mar, 2017. Subsequently, in the first quarter of 2017, the company initiated a phase III clinical program for Inclisiran. The phase III study is designed to support the submission of a new drug application (NDA) to the FDA.

Earlier in the day, Medicines Company and Alnylam (ALNY) issued a press release, stating that the FDA has approved of the aforementioned phase III study design. The study will be conducted in patients with atherosclerotic cardiovascular disease (ASCVD) and familial hypercholesterolemia (FH), and will collectively enroll approximately 3,000 subjects randomized to treatment with inclisiran (1,500) or placebo (1,500). The primary endpoint for all pivotal trials will be LDL-C change from baseline. The NDA submission is expected by the end of 2019.

Separately, the companies will also conduct a cardiovascular outcomes trial (CVOT) in approximately 14,000 subjects to determine the cardiovascular benefits of treatment with Inclisiran. The FDA also gave a go-ahead to this study’s design.

Moreover, during the fourth quarter of 2016 the company announced impressive results from the TANGO 1 phase III study of Carbavance (meropenem-vaborbactam) in patients with complicated urinary tract infection. The new drug application (NDA) filing for Carbavance in Feb 2017 was accepted by the FDA for priority review. Additionally, a TANGO 2 phase III study is underway comparing the safety, tolerability and efficacy of Carbavance with best available therapy in patients with selected serious infections. Data from the study is expected before the end of third quarter 2017.

Zacks Rank & Key Pick

The Medicines Company currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector include Heska Corporation (NASDAQ:HSKA) which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Heska’s earnings per share estimates increased from $1.53 to $1.65 for 2017 and from $1.80 to $2.01 for 2018 over the last 60 days. The company posted positive surprises in three of the four trailing quarters with an average beat of 291.54%.

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