The Medicines Company’s (MDCO) fourth-quarter earnings of 26 cents per share were well below the year-ago earnings of 52 cents per share. Including the impact of stock-based compensation expense, fourth-quarter 2013 earnings stood at 16 cents per share, below the year-earlier earnings of 45 cents. The Zacks Consensus Estimate for the fourth quarter of 2013 was 14 cents per share.
Including one-time items, the company reported earnings of 2 cents per share against the year-ago earnings of 38 cents. The company’s fourth quarter 2013 revenues rose 16% year over year to $185.0 million, ahead of the Zacks Consensus Estimate of $181 million.
The Medicines Co.’s earnings for full-year 2013 stood at $1.50 per share, substantially above the year-ago earnings of $1.30 per share. Including the impact of stock-based compensation expense, 2013 earnings came in at $1.13 per share, above the year-ago earnings of $1.03 per share. The Zacks Consensus Estimate for 2013 was 37 cents per share.
Including one-time items, the company reported 2013 earnings of 25 cents per share compared to 2012 earnings of 93 cents. 2013 revenues increased 23% year over year to $687.9 million, ahead of the Zacks Consensus Estimate of $685 million.
The Quarter in Detail
Angiomax U.S. sales increased 1% to $142.4 million due to an increase in price. Ex-U.S. sales of Angiomax augmented 32% to $18.5 million during the quarter.
The Medicines Co. is also looking to expand Angiomax’ label in the peripheral endovascular intervention (PEI) indication. The company is conducting a phase III study (ENDOMAX – ENDOvascular interventions with AngioMAX) in patients undergoing PEI.
Recothrom sales in the U.S. totalled $19.7 million. The Medicines Co. started selling Recothrom from Feb 8, 2013 under its collaboration with Bristol-Myers Squibb (BMY). Net U.S. sales of The Medicines Co.’s Ready-to-Use Argatroban, Cleviprex and generic portfolio came in at $4.4 million in the fourth quarter of 2013. The Medicines Co. intends to launch Cleviprex in Europe later in the year.
2014 Outlook
The Medicines Co. expects net revenues for the year in the $745−$760 million range, representing an 8−10% rise from the 2013 figure. The company’s 2014 revenue guidance excludes the impact of new product launches during the year due to an uncertainty in the timing of the regulatory approvals. The Zacks Consensus Estimate of $757 million is toward the higher end of the company’s guidance.
Research and development expenses are expected in the range of $150−$160 million, excluding stock−based compensation expenses. Selling, general and administrative expenses are expected in the range of $215−$225 million, excluding stock−based compensation expenses.
Pipeline Update
Earlier in the month, The Medicines Co. was dealt a blow when the U.S. Food and Drug Administration’s (FDA) Cardiovascular and Renal Drugs Advisory Committee (CRDAC) provided a negative recommendation on the approval of intravenous anticoagulant, cangrelor.
The company is looking to get cangrelor approved for the reduction of thrombotic cardiovascular events (including stent thrombosis) in patients with coronary artery disease (CAD) undergoing percutaneous coronary intervention (PCI) and in patients requiring bridging from oral antiplatelet therapy to surgery. The FDA panel voted against the approval of cangrelor for both indications. A response from the FDA on cangrelor’s marketing application is expected by Apr 30.
Meanwhile, a regulatory submission for Fibrocaps (a dry powder topical fibrinogen thrombin hemostat) was filed in the EU in Dec 2013. The U.S. filing is also slated soon. A supplemental new drug application (sNDA) for Ionsys (a patient-controlled analgesia system for the management of acute postoperative pain) will be submitted by Jun 30, 2014, in the U.S. and in the third quarter of 2014 in the EU. Moreover, an NDA for oritavancin (acute bacterial skin and skin structure infections) was filed in the U.S. in Dec 2013 with a verdict on the approval of the candidate expected by Aug 6, 2014.
Our Take
We are impressed by The Medicines Co.’s progress with its pipeline. However, the FDA panel voting against the approval of cangrelor is disappointing. Moreover, the unfavourable voting lowered the chances of cangrelor gaining an outright approval. We are also of the opinion that The Medicines Co. has provided a modest revenue guidance for 2014.
The Medicines Co. carries a Zacks Rank #3 (Hold). Some better-ranked stocks include Alexion Pharmaceuticals, Inc. (ALXN) and Actelion Ltd. (ALIOF). While Alexion sports a Zacks Rank #1 (Strong Buy), Actelion carries a Zacks Rank #2 (Buy).
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