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Medicines Company (MDCO) Reports Q4 Loss, Revenues Slump Y/Y

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The Medicines Company (MDCO - Free Report) reported fourth-quarter 2017 loss of $2.19 per share. The Zacks Consensus Estimate stood at a loss of $1.48.

However, excluding the impact of one-time and special items, adjusted loss per share came in at 61 cents, narrower than the year-ago loss of 78 cents.

The Medicines Company’s shares decreased more than 3% on Feb 21 due to weak results reflected in its earnings. Moreover, shares of the company have underperformed the industry in a year’s time. The stock has lost 39.5% compared with the industry’s decline of 2.4%.


Quarterly revenues plunged 50.6% year over year to $8.6 million. Also, the top line significantly missed the Zacks Consensus Estimate of $20 million. This downside in the reported quarter is mainly attributable to lower sales of the company’s marketed drug, Angiomax.

Last month, The Medicines Company completed the sale of its infectious disease business unit to Melinta Therapeutics, an antibiotics company. With this divestiture, the former divested the worldwide rights of Orbactiv, Minocin and the recently launched, Vabomere. This deal was executed for a consideration of $215 million of guaranteed cash and approximately 3.3 million shares of Melinta’s common stock. The Medicines Company is also entitled to receive tiered royalty payments of 5-25% on worldwide net sales of the aforementioned drugs.

Quarter in Detail

Net revenues for the quarter included royalty revenues from the authorized generic sales of Angiomax by Novartis AG's (NVS - Free Report) generic arm, Sandoz, apart from net product sales of the drug. Total Angiomax revenues slumped 55% to $4.1 million in the quarter under review on its loss of exclusivity and increased generic competition.

The Medicines Company’s adjusted research and development (R&D) expenses (excluding the impact of one-time items) increased 21% year over year to $33.6 million on higher spend in support of inclisiran. It is the company’s blockbuster candidate, developed under a collaboration agreement with Alnylam Pharmaceuticals (ALNY - Free Report) for treating hypercholesterolemia.

Notably, in November 2017, The Medicines Company along with Alnylam, initiated of a phase III, ORION-11 study on inclisiran for treating patients with atherosclerotic cardiovascular disease (ASCVD) and elevated LDL-cholesterol. The company anticipates submitting a regulatory filing for inclisiran in the United States and the EU by the end of 2019.

Adjusted selling, general and administrative (SG&A) expenses (excluding the impact of one-time items) decreased 44% to $21 million.

2017 Results

Full-year sales declined significantly to $44.8 million from $143.2 million a year ago. Sales substantially missed the Zacks Consensus Estimate of $80.1 million.

Full-year loss of $8.40 per share was narrower than the Zacks Consensus Estimate of a loss of $8.86. The company had incurred earnings of 28 cents in the previous year.

The Medicines Company Price, Consensus and EPS Surprise

The Medicines Company Price, Consensus and EPS Surprise | The Medicines Company Quote


Zacks Rank & Key Pick

The Medicines Company carries a Zacks Rank #3 (Hold). A better-ranked stock in the health care sector is Exelixis, Inc. (EXEL - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Exelixis’ earnings per share estimates have been revised upward from 73 cents to 77 cents for 2018 over the last 60 days. The company pulled off a positive surprise in all the trailing four quarters with an average beat of 572.92%. Share price of the company has surged 28.2% in a year’s time.

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