WALTHAM, Mass., Aug. 09, 2016 (GLOBE NEWSWIRE) -- AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) today reported unaudited consolidated financial results for the second quarter ended June 30, 2016. Total product and service revenues for the second quarter of 2016 increased approximately 50% to $127.4 million. This increase was driven by record sales of Makena and Feraheme and the addition of Cord Blood Registry® (CBR) to the company’s product portfolio in August of 2015. The company reported second quarter 2016 operating income of $18.1 million and a net loss of $0.6 million. Non-GAAP adjusted EBITDA for the second quarter of 2016 increased 24% to $64.6 million¹ versus the same period in 2015. After deducting cash interest expense from adjusted EBITDA, the company generated second quarter 2016 non-GAAP net income of $50.3 million.¹

“Strong execution, including the recent successful launch of the single-dose, preservative-free formulation of Makena and expanded use of our Makena @Home service, drove 21% sales growth in the second quarter over the first quarter of 2016,” stated William Heiden, AMAG’s chief executive officer. “In addition to solid commercial performance during the quarter, we made further progress on both our Feraheme and Makena next-generation development programs.”

¹ See summaries of GAAP to non-GAAP adjustments at the conclusion of this press release.

Makena Next Generation Development Update
AMAG has completed pilot pharmacokinetic (PK) studies and is preparing for the initiation of a definitive PK study later this year for the Makena subcutaneous auto-injector device. The company recently met with the U.S. Food and Drug Administration (FDA) to review its planned supplemental new drug application (sNDA) filing for this new Makena product. Based on those discussions, the company has accelerated its plan to conduct a comparative pain study concurrently with the definitive PK study so that it can include the pain data in the sNDA submission. Successfully demonstrating a reduction in pain will allow the company to apply for seven years of orphan drug exclusivity on the drug-device combination. Orphan drug exclusivity is based on the FDA’s assessment of clinical superiority as measured by a significant improvement in safety or efficacy over the existing standard of care. This exclusivity, along with the already issued patents on the auto-injector device and a filed patent application on the route of administration, would provide multiple layers of protection. The inclusion of clinical pain data in the sNDA will likely result in a 10 month regulatory review timeline. The company’s timeline to file the sNDA in the second quarter of 2017 remains unchanged, with an anticipated FDA approval in the first quarter of 2018.

“We believe that submitting the pain data with the sNDA filing is the best strategy to extend and protect the Makena franchise and secure our leadership position in this market for many years to come,” said Mr. Heiden.

Second Quarter 2016 and Recent Business Highlights

• Delivered record net product and service revenues of $127.4 million in the second quarter of 2016, compared with $84.7 million in the same period last year. This increase of approximately 50% was driven by record sales of both Makena and Feraheme and the addition of CBR.
• Achieved record Makena sales of $78.4 million in the second quarter of 2016, compared with $63.6 million in the same period last year. This 23% growth in sales was driven exclusively by an increase in volume. This growth resulted in Makena market share of 37%, four percentage points over the first quarter of 2016.
• Generated a record $24.3 million of Feraheme sales in the second quarter of 2016, or 18% growth over the same period last year, the majority of which was driven by volume.
• Increased non-GAAP CBR revenue by 5%¹ over the first quarter of 2016 due to improved net revenue per new customer. In addition, new customer volume has stabilized on a sequential quarter basis.
• Received approval from the FDA in July 2016 of an additional source of supply for the single-dose, preservative-free formulation of Makena.
• Completed pilot PK studies for the Makena subcutaneous auto-injector and plans to conduct a pain study designed to establish clinical superiority over the current intramuscular injection concurrently with the definitive PK study.
• Exceeded forecasted patient enrollment to date in the company’s head-to-head, Phase 3 clinical trial evaluating Feraheme in adults with iron deficiency anemia (IDA). This study, which is now approximately 25% enrolled, is intended to support an sNDA filing to broaden the use of Feraheme beyond the current chronic kidney disease (CKD) indication to include all adult IDA patients who have failed or cannot tolerate oral iron treatment. The company anticipates filing an sNDA to broaden the Feraheme label in 2017.
• Generated an increase in cash, cash equivalents and investments of $80.1 million in the first half of 2016 to $546.5 million, net of $20.0 million utilized to repurchase the company’s common stock and $8.8 million to repay debt.

Second Quarter Ended June 30, 2016 (unaudited)
Financial Results (GAAP Basis)
Total revenues for the second quarter of 2016 were $127.4 million, compared with $123.9 million in the second quarter of 2015. Included in last year’s second quarter results was $39.2 million of collaboration revenue primarily related to the one-time acceleration of previously deferred revenue from the termination of the company’s ex-US ferumoxytol marketing partnership agreement. Net product and service revenues totaled $127.4 million in the second quarter of 2016, compared with $84.7 million in the same period last year. This increase is related to record sales of both Makena and Feraheme and the addition of CBR, which AMAG purchased in August 2015. Net product sales of Makena increased to $78.4 million in the second quarter of 2016, compared with $63.6 million in the same period last year. This growth in Makena sales was driven by a 24% increase in volume, primarily as a result of the successful launch of the single-dose, preservative-free formulation and increased enrollments in the company’s Makena @Home program. Sales of Feraheme and MuGard® totaled $24.6 million in the second quarter of 2016, compared with $21.1 million in the second quarter of 2015. Service revenue from CBR, on a GAAP basis, totaled $24.4 million in the second quarter of 2016.

Total costs and expenses, including costs of product sales and services, totaled $109.3 million for the second quarter of 2016, compared with $62.8 million for the same period in 2015. The increase in operating expenses in 2016 was related to: 1) the cost of services and operating expenses associated with CBR, which the company acquired in the third quarter of 2015, 2) a $15.7 million impairment charge of the MuGard intangible asset partially offset by a $5.6 million reduction in the contingent consideration liability, both due to the lack of broad reimbursement and insurance coverage for the product, 3) higher non-cash amortization of intangible assets from the company’s acquisitions, and 4) higher research and development (R&D) costs that included initiation of the company’s Phase 3 clinical trial to broaden the use of Feraheme to include all adult IDA patients and costs to support the company’s Makena subcutaneous auto-injector development program.

Second quarter 2016 operating income totaled $18.1 million, compared with $61.1 million in the second quarter of last year. The company reported a net loss of $0.6 million, or ($0.02) per basic share and diluted share, for the second quarter of 2016, compared with net income of $33.3 million, or $1.09 per basic share and $0.82 per diluted share, for the same period in 2015. Both operating income and net income in the second quarter of 2015 benefitted from $39.2 million of collaboration revenue from a former ex-US licensing partner, which includes $5.6 million of cash received.

Balance Sheet Highlights
The company’s cash, cash equivalents and investments increased by $80.1 million in the first half of 2016 to approximately $546.5 million, net of $20.0 million utilized to repurchase the company’s common stock and $8.8 million to repay debt. Total debt (principal amount outstanding), including $200 million of convertible debt, was approximately $1.04 billion as of June 30, 2016.

“We are pleased with our financial performance during the first half of 2016,” stated Ted Myles, chief financial officer of AMAG. “With increasing revenue and a disciplined approach to expense management, our business successfully generated significant EBITDA and cash flows. This further strengthens our balance sheet giving us additional capacity to pursue our portfolio expansion strategy.”

Financial Results (Non-GAAP Basis)^1,2
Non-GAAP revenues totaled $132.5 million in the second quarter of 2016, up from $90.3 million in the second quarter of 2015. Non-GAAP CBR revenue totaled $29.4 million in the second quarter of 2016. The difference between GAAP and non-GAAP revenue for CBR represents purchase accounting adjustments related to deferred revenue. Non-GAAP revenue in 2015 excluded certain non-cash revenue related to the termination of the company’s ex-US ferumoxytol marketing agreement with its former partner.

Total costs and expenses, including costs of product sales and services, on a non-GAAP basis totaled $67.8 million in the second quarter of 2016, compared with total costs and expenses of $38.3 million in the same period in 2015. Non-GAAP adjusted EBITDA for the second quarter of 2016 was $64.6 million, compared with $52.1 million for the same period in 2015. Included in second quarter 2015 adjusted EBITDA was the $5.6 million cash portion of collaboration revenue recognized in connection with the termination of the company’s ex-US ferumoxytol marketing partnership agreement.

After deducting cash interest expense from adjusted EBITDA, the company generated second quarter 2016 non-GAAP net income of $50.3 million, or $1.47 per non-GAAP basic share and $1.45 per non-GAAP diluted share. In the second quarter of 2015, non-GAAP net income totaled $44.8 million, or $1.46 per non-GAAP basic share and $1.12 per non-GAAP diluted share.

About AMAG
AMAG is a biopharmaceutical company focused on developing and delivering important therapeutics, conducting clinical research in areas of unmet need and creating education and support programs for the patients and families we serve. Our products support the health of patients in the areas of maternal health, anemia management and cancer supportive care. Through CBR®, we also help families to preserve newborn stem cells, which are used today in transplant medicine for certain cancers and blood, immune and metabolic disorders, and have the potential to play a valuable role in the ongoing development of regenerative medicine. For additional company information, please visit www.amagpharma.com.