AMAG Pharmaceuticals Inc. Reports Operating Results (10-Q)
Amag Pharmaceuticals Inc. has a market cap of $697.2 million; its shares were traded at around $33.22 with and P/S ratio of 40.6. AMAG is in the portfolios of Steven Cohen of SAC Capital Advisors, Paul Tudor Jones of The Tudor Group.
Highlight of Business Operations: For the three months ended March 31, 2010, we recognized net product sales of Feraheme of $13.1 million, including approximately $2.2 million of previously deferred product revenues. During the third quarter of 2009, shortly after the launch of Feraheme, we implemented a Launch Incentive Program under which certain dialysis organizations purchased Feraheme directly from us. This program provided certain customers with, among other things, discounted pricing and expanded rights of return. As a result, we deferred revenues associated with this program which we recognize as revenues as the participating organizations utilize their Feraheme inventory.
In January 2010, we sold 3.6 million shares of our common stock, $0.01 par value per share, in an underwritten public offering at a price to the public of $48.25 per share, resulting in gross proceeds of approximately $173.7 million. Net proceeds to us after deducting fees, commissions and other expenses related to the offering were approximately $165.6 million. The shares were issued pursuant to a shelf registration statement on Form S-3 which became effective upon filing.
Total revenues were $13.3 million and $1.0 million for the three months ended March 31, 2010 and 2009, respectively, representing an increase of approximately $12.3 million, or greater than 100%. The increase in revenues was primarily due to product sales of Feraheme following its FDA approval and commercial launch in mid-2009.
The $12.9 million, or greater than 100%, increase in net product sales was primarily due to the FDA approval and subsequent U.S. commercial launch of Feraheme in mid-2009. Included in Feraheme product sales is $2.2 million of product sales related to previously deferred revenues recorded under our Launch Incentive Program.
Beginning in 2011, we may incur our share of a new fee assessed on all branded prescription drug manufacturers and importers. This fee will be calculated based upon Ferahemes percentage share of total branded prescription drug sales to U.S. government programs (such as Medicare, Medicaid and VA and PHS discount programs) made during the previous year. The aggregated industry wide fee is expected to total $28 billion through 2019, ranging from $2.5 billion to $4.1 billion annually. Presently, uncertainty exists as many of the specific determinations necessary to implement this new legislation have yet to be decided and communicated to industry participants. For example, determinations as to how the annual fee on branded prescription drugs will be calculated and allocated remain to be clarified, though, as noted above, this provision will not be effective until 2011.
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