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The Medicines Co. Continues to Focus on Pipeline Development

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We issued an updated report on The Medicines Company (MDCO - Free Report) on Sep 21.

Notably, the Medicines Co. has undertaken a restructuring program to boost shareholder value. In fact, the company is exploring options for optimizing capital structure and liquidity position by divesting certain non-core products and businesses in order to generate non-dilutive cash and reduce associated cash burn and capital requirements.

In February 2016, the Medicines Co. divested its hemostasis portfolio, which included drugs such as Recothrom, PreveLeak and Raplixa to Mallinckrodt plc (MNK - Free Report) for up to $409 million.

However, the Medicines Co.’s shares have underperformed the industry year to date. The stock has been up 3% compared with the industry’s gain of 15.8% in the same time frame.

With the divestment of non-core products, The Medicines Co. is focusing on developing pipeline candidates targeting its key focus areas. Currently company has one candidate representing blockbuster potential, namely Inclisiran (formerly PCSK9si; hypercholesterolemia – currently in phase II ORION studies). In August 2017, the company announced new encouraging one-year safety and efficacy data from the ongoing ORION-1 phase II study.

Also, The Medicines Co declared that the FDA has granted accelerated approval to its experimental antibiotic, Vabomere, a combination of meropenem and vaborbactam, for treating complicated urinary tract infections (cUTI), including the pyelonephritis in August, this year.

The company expects to make Vabomere available in the market in fourth-quarter 2017. Markedly, the FDA’s accelerated approval of Vabomere is a huge positive for the company given the lucrative market it targets. The Medicines Co also filed a new drug application (NDA) for the antibiotic in February, which is currently under review in the EU.

However, with The Medicines Co.’s flagship product Angiomax facing generic competition it has entered a challenging period where driving top-line growth will become increasingly difficult. Evidently, the company recorded lower sales from Angiomax in the second-quarter of 2017, due to the loss of exclusivity.

 

The Medicines Company Price and Consensus

 

The Medicines Company Price and Consensus | The Medicines Company Quote

Zacks Rank & Stocks to Consider

The Medicine Co. currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the health care sector include Alexion Pharmaceuticals, Inc. (ALXN - Free Report) and Regeneron Pharmaceuticals, Inc. (REGN - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Alexion Pharmaceuticals’ earnings per share estimates moved up from $5.32 to $5.60 for 2017 and from $6.56 to $7.06 for 2018 over the last 60 days. The company delivered positive earnings surprises in all the trailing four quarters, with an average beat of 11.12%. The share price of the company has increased 16.9% year to date.

Regeneron’s earnings per share estimates increased from $12.84 to $14.99 for 2017 and from $15.32 to $16.64 for 2018 over the last 60 days. The company pulled off positive earnings surprises in two of the trailing four quarters, with an average beat of 10.11%. The share price of the company has increased 18.1% year to date.

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