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The Medicines Company (MDCO - Analyst Report) reported second quarter earnings of 44 cents per share, well above the year-ago earnings of 27 cents per share.

Including one-time items, the company reported earnings of 30 cents per share compared to the year-ago earnings of 25 cents per share. The Zacks Consensus Estimate for the first quarter of 2013 was 32 cents per share. Second quarter 2013 revenues increased 27% year over year to $172.8 million, ahead of the Zacks Consensus Estimate of $168 million.

The Quarter in Detail

Angiomax U.S. sales increased 14% to $137.9 million due to higher volume and price increases. Ex-U.S. sales of Angiomax increased 11% to $13.2 million during the quarter. The Medicines Company reported continued growth in market share in the percutaneous coronary intervention (PCI) segment in the U.S.

Recothrom sales in the U.S. were $17.9 million. The Medicines Company started selling Recothrom from Feb 8, 2013 under its collaboration with Bristol-Myers Squibb Company (BMY - Analyst Report).

Adjusted research and development expenses were $27 million.

Adjusted selling, general and administrative expenses increased 32% to $52.7 million for the quarter.

2013 Guidance Maintained

The Medicines Company maintained its net revenue guidance of 20%−22% increase in 2013. Revenues in the third quarter are expected to remain flat on a sequential basis reflecting a historical slowdown in cath labs and surgical suites.

Meanwhile, The Medicines Co. has made significant progress with its pipeline. While its antiplatelet candidate, Cangrelor, is currently under FDA review (for use in patients undergoing PCI and in patients requiring bridging from oral antiplatelet therapy to surgery), the company intends to file a new drug application (NDA) for its antibiotic candidate, oritavancin, in the fourth quarter. The EU submission for oritavancin is expected in the first half of 2014. Oritavancin peak sales are expected to be at least $400 million.

As far as Cangrelor is concerned, a response from the FDA should be out in the second quarter of 2014. The company intends to file for EU approval in the fourth quarter. The company estimates Cangrelor peak sales at $450 million.

The Medicines Company entered into an agreement with Dutch company, ProFibrix B.V. in Jun 2013, under which it will receive an option to purchase all the outstanding capital stock of the latter. The option may be exercised by The Medicines Co. once it reviews results from an ongoing phase III study being conducted with ProFibrix’ lead biologic, Fibrocaps. The company expects to come at a decision regarding this option in the coming few weeks.

Our Take

The Medicines Company’s second quarter results were strong. Moreover, we are impressed by the company’s progress with its pipeline. With Cangrelor under FDA review and oritavancin scheduled to be filed this year, The Medicines Co. could potentially have two additional products in its portfolio next year. We expect more visibility on the pipeline at the company’s R&D day to be held on Oct 10.

The Medicines Company currently carries a Zacks Rank #4 (Sell). Companies that currently look well-positioned include Jazz Pharmaceuticals (JAZZ - Analyst Report) and Sarepta Therapeutics, Inc. (SRPT - Analyst Report) with Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively.

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