Why Is AMAG Pharmaceuticals (AMAG) Up 27.3% Since Last Earnings Report?

A month has gone by since the last earnings report for AMAG Pharmaceuticals (AMAG). Shares have added about 27.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is AMAG Pharmaceuticals due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

AMAG Q2 Loss Widens, Sales Lag Estimates, 2019 Guidance Cut

AMAG incurred a loss of $1.28 per share in the second quarter of 2019, much wider than the Zacks Consensus Estimate of a loss of 66 cents as well as the year-ago quarterly loss of 75 cents.

Moreover, quarterly revenues came in at $78.1 million, down approximately 46.5% from $146.2 million a year ago. The top line also missed the Zacks Consensus Estimate of $92 million.

Quarter in Detail

Makena sales of $30.9 million slumped 70.6% year over year due to high generic competition to the Makena IM product and IM supply constraints. On account of the ongoing supply issues and increased generic competition, AMAG made a mutual decision with Prasco to exit the generic IM market on Aug 6, 2019. However, the company is encouraged by strong underlying demand for the subcutaneous auto-injector, the market share of which grew to 63% in the second quarter. AMAG though continues to firmly believe in the clinical utility of Makena.

Combined sales of Feraheme and MuGard amounted to $42.1 million, up almost 11.4% year over year. Intrarosa generated sales of $4.9 million compared with $3.2 million in the year-ago quarter.

Operating expenses including the cost of product sales were $193.9 million, up 85.7% from the year-earlier quarter. This included a $4.8-million write-down value of Makena IM inventory.

2019 Outlook

Due to the supply disruption of the Makena IM product and the subsequent termination of the distribution/supply agreement with Prasco, AMAG lowered its financial guidance for 2019. The company now expects full-year revenues of $325-$355 million compared with the previous estimate of $365-$415 million. The Zacks Consensus Estimate for 2019 revenues stands at $369.54 million.

AMAG also removed its expectations of milestone payments related to ciraparantag from its 2019 financial outlook as the company was informed by a development partner of its intention to terminate the existing collaboration agreement.

Other Updates

Further, in January 2019, AMAG acquired the Connecticut-based privately held Perosphere Pharmaceuticals Inc., which will add the latter’s investigational candidate ciraparantag to its portfolio. This move will also strengthen the company’s expertise in hematology pipeline. AMAG plans to initiate a phase IIIa study on ciraparantag in the fourth quarter of 2019.

The company has another candidate in its portfolio, AMAG-423, which is currently under development for the treatment of severe preeclampsia in pregnant women.

In June, AMAG announced that the FDA has approved Vyleesi (bremelanotide injection) to treat the acquired, generalized hypoactive sexual desire disorder (HSDD) in premenopausal women. The drug will be launched next month.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted -59.66% due to these changes.

VGM Scores

Currently, AMAG Pharmaceuticals has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, AMAG Pharmaceuticals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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