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AMAG Posts Wider-Than-Expected Q3 Loss, Beats on Revenues

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AMAG Pharmaceuticals Inc. (AMAG - Free Report) reported adjusted loss from continuing operations of 84 cents per share in the third quarter of 2018 (excluding a $35.9 million loss on extinguishment of debt), against earnings of $1.57 reported in the year-ago quarter. The Zacks Consensus Estimate stood at a loss of 77 cents.

Quarterly revenues came in at $122.2 million, down approximately 1.7% from $124.3 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $118 million.

Shares of the company increased 41.6% year to date, against the industry’s decline of 16.2%.

 

Quarter in Detail

The company completed the sale of Cord Blood Registry (CBR) in August 2018. Hence, CBR's results have been excluded from the financial results. The sale of CBR will allow the company to eliminate the senior notes from its capital structure and strengthen its balance sheet as it continues to generate adjusted earnings before interest, tax, depreciation and amortization (EBITDA). The company’s long-term strategy focuses on continuing to grow and further diversify its pharmaceutical portfolio. 

Makena sales came in at $80.2 million, down 18% year over year due to supply disruptions of the Makena branded IM products along with generic competition entering the market in July of 2018.

Combined sales of Feraheme and MuGard amounted to $37.1 million, up 41% year over year.

Costs and expenses from continuing operations, including costs of product sales and services, were $141.6 million, down 62.6% from the year-ago quarter.

Discontinued Operations

As a result of the sale of CBR for $530 million in cash, CBR has been classified as discontinued operations for accounting purposes. Net income from discontinued operations in the third quarter of 2018 was $95.5 million, of which $89.6 million was the gain on the sale of the business compared with $3.7 million of net income in the year-ago period. The company paid off $475 million of high-yield debt, eliminating nearly $40 million in annual cash interest expenses.

2018 Outlook

AMAG now expects revenues for 2018 to be $470-$490 million, narrowed from its previous guidance of $450-$490 million.

Others

During the quarter the company acquired AMAG-423, an orphan drug candidate for the treatment of severe preeclampsia (previously referred to as 'Velo Option'), reaffirming its focus on delivering innovative therapies that address unmet medical needs.

AMAG Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

AMAG Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | AMAG Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

AMAG carries a Zacks Rank #3 (Hold).

Some better-ranked stocks worth considering are Bristol-Myers Squibb Co. (BMY - Free Report) , Eli Lilly and Co. (LLY - Free Report) and Merck & Co. Inc. (MRK - Free Report) . While Bristol-Myers sports a Zacks Rank #1 (Strong Buy), Lilly and Merck carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Bristol-Myers’ earnings per share estimates have increased from $3.59 to $3.81 for 2018 and from $3.83 to $4.03 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 11.99%.

Lilly’s earnings per share estimates have increased from $5.42 to $5.47 for 2018 and from $5.69 to $5.78 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 10.15%. The stock has rallied 27.7% year to date.

Merck’s earnings per share estimates have increased from $4.26 to $4.34 for 2018 and from $4.58 to $4.71 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all of the trailing four quarters with an average beat of 3.96%. The stock has rallied 29.9% year to date.

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