Angiomax, MDCO's drug that competes with Integrilin, fails to sell so well this quarter, causing MDCO to warn.
>>PARSIPPANY, N.J.--(BUSINESS WIRE)--Oct. 5, 2005--The Medicines Company (NASDAQ: MDCO - News) today lowered its revenue guidance for 2005 based on less growth than previously forecast in end-user demand for Angiomax® (bivalirudin) and the restructuring of the Company's wholesaler arrangements. The Company has agreed with its largest wholesalers to enter into new fee-for-service arrangements that the Company expects will improve its margins, create more predictable buying patterns, and result in reductions in wholesaler inventories.
The Company now expects 2005 net revenues of approximately $150 million. Previously, the Company had said it expected net revenues for 2005 at the lower end of a range of $195 million to $204 million.
Based on revenues to date and lower product sales expected to result in the short term from the restructured wholesaler arrangements, the Company now expects a 2005 loss of approximately $10 million, as compared to previous guidance of 2005 earnings at the low end of a range of $24 million to $31 million. For the third quarter ended September 30, 2005, the Company, on a preliminary basis, expects to report net revenues of approximately $30 million and a net loss of approximately $10 million.
The Company expects the restructured arrangements with wholesalers to provide:
competitive distribution costs, improving margins by 1-2%;
an end to speculative buying by wholesalers, leading to lower inventory levels;
more predictable buying patterns, resulting in more consistent accounts receivable;
more frequent data on inventory, providing better planning and control; and
guaranteed customer order fulfillment at a rate of 98%.
As a result, aggregate wholesaler inventory levels are expected to be reduced from an average of 14 weeks to four to six weeks by the end of the first quarter of 2006. These inventory reductions are expected to reduce reported net sales to wholesalers by approximately $26 million in 2005 and $13 million in the first quarter of 2006.
Clive Meanwell, Chairman and Chief Executive Officer, said, "In a sluggish cath lab market, Angiomax hospital sales have grown by 42% this year compared to last year, but we are about $19 million below our ambitious hospital sales plan for 2005. In addition, we believe that wholesaler changes will strengthen our future performance and that the benefits outweigh the short-term pain."
John Kelley, President and Chief Operating Officer, said, "In the past year, we have increased market share for Angiomax in PCI from 26% to 33%. We expect to continue to grow and gain market share as our new label and increased selling resources take effect. We are also looking forward to a series of important events over the coming months including completion of the ACUITY trial this year and presentation of results at the ACC conference next March and starting Cangrelor Phase III trials."
Conference Call
The Company will host a conference call with management today at 5:00 p.m. EDT to discuss this announcement as well as updates on potential new indications for Angiomax and developments concerning Clevidipine and Cangrelor.
The webcast and accompanying slides can be accessed at www.themedicinescompany.com. Alternatively, the call dial-in is 800-638-4930, passcode is 79545099. From outside the U.S., dial 617-614-3944 (passcode is 79545099). The replay will be available following the call at 7.30 p.m. EDT for two weeks. The replay can be accessed by dialing 888-286-8010. Outside the U.S., dial 617-801-6888. The replay passcode is 36223991. <<
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Cheers, Tuck |
