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The Medicines Company (MDCO - Analyst Report) reported fourth quarter earnings of 71 cents per share, compared with the year-ago earnings of 48 cents per share. The Zacks Consensus Estimate for the fourth quarter was 27 cents. Fourth quarter 2012 revenues increased 20.6% year-over-year to $159.5 million, well above the Zacks Consensus Estimate of $147 million.

Full-year earnings increased 18.9% to $1.64 per share. Full-year revenues came in at $558.6 million, up 15.2%. The Zacks Consensus Estimate for the full year was $546 million.

The Quarter in Detail

Angiomax US sales increased 13.7% to $141.2 million. Ex-US sales of Angiomax increased 77.2% to $14.0 million during the quarter.

Research and development expenses during the quarter decreased 21.5% to $26.1 million.

Selling, general and administrative expenses increased 28% to $44.7 million for the quarter.

2013 Guidance

The Medicines Company’s 2013 guidance is mainly based on the performance of key products like Angiomax, Cleviprex and Argatroban. The company is confident that Angiomax can withstand generics competition.

The Medicines Company expects net revenues to grow in the range of 20%−22% in 2013. Research and development expenses are expected to be 20% of net revenues, excluding stock−based compensation expense. The company will continue phase IV trials on Angiomax and Cleviprex.

Angiomax sales in Europe are expected to be in the range of $80−$100 million.

Selling, general and administrative expenses are expected in the range of 27%−30% of net revenues, excluding stock−based compensation expense.

For the first quarter of 2013, net global revenues are forecast in the range of $145−$155 million.

Pipeline Update

In Dec 2012, The Medicines Company announced positive results on oritavancin for the potential treatment of acute bacterial skin and skin structure infections (ABSSSI). Both the primary and secondary endpoints of the SOLO I trial were successfully met.

Enrollment for SOLO II trial is almost 85% complete. Positive results from this study could allow the company to move ahead with regulatory applications and potentially launch the product in 2014.

In Jan 2013, The Medicines Company announced positive results on its phase III candidate, cangrelor. The candidate is being developed for the prevention of platelet activation and aggregation that leads to thrombosis in the acute care setting, including patients undergoing percutaneous coronary intervention (PCI).

The Medicines Company intends to submit data from the CHAMPION PHOENIX and BRIDGE studies and seek marketing approval in the US in the second quarter of 2013.

We are positive on The Medicines Company’s effort to develop its pipeline. Oritavancin and cangrelor, if approved, will boost the company’s product portfolio. We also expect Angiomax to continue to do well. However, we prefer remaining on the sidelines until we get more visibility on pipeline progress.

The Medicines Company carries a Zacks Rank #3 (Hold). However, other stocks like Cempra, Inc. (CEMP - Snapshot Report), BioDelivery Sciences International, Inc. (BDSI - Snapshot Report) and Salix Pharmaceuticals Ltd. (SLXP - Analyst Report) look more favorable than The Medicines Company. They all carry a Zacks Rank #2 (Buy).

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