The Medicines Company May Report Steep Revenue Decline in 2017



Negative drivers in 2Q17

In 2Q17, The Medicines Company (MDCO) reported a net loss from continuing operations of $397.3 million, which was a significant fall from $181.8 million in 2Q16. Its reported net loss from continuing operations of $5.52 per share in 2Q17 compares to $2.51 per share in 2Q16. The company reported an adjusted net loss from continuing operations of $73.5 million in 2Q17, which was higher than $48.2 million reported in 2Q16. The company’s adjusted net loss from continuing operations was $1.02 per share in 2Q17, which was significantly worse than $0.69 in 2Q16.

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In 2Q16, The Medicines Company saw a gain of $288.0 million from the sale of its non-core ACC business. In 2Q17, the company discontinued Ionsys from the US market, which resulted in a net charge of $277.0 million. While $268.1 million of this charge was non-cash, it nevertheless added to the company’s losses in 2Q17. Its decision to discontinue the MDCO-700 research program added $27.3 million of non-cash charges to its losses in 2Q17.

The Medicines Company accounts for 0.12% of the iShares Russell 2000 ETF’s (IWM) total portfolio holdings.

Steep decline in revenues

Wall Street analysts have projected The Medicines Company’s 2017 revenues to be $99.3 million, which is YoY (year-over-year) fall of 40.8%.

For 2017, peers United Therapeutics (UTHR), Jazz Pharmaceuticals (JAZZ), and Ligand Pharmaceuticals (LGND) are expected to report revenues of $1.6 billion, $1.6 billion, and $134.0 million, respectively.

The generic erosion of Angiomax’s market share has been the key factor affecting The Medicines Company’s revenues since 2015. Starting on June 1, 2017, The Medicines Company discontinued the sale of Ionsys in the United States.

In the next part of this series, we’ll look at the growth prospects for the investigational PCSK9 (proprotein convertase subtilisin/kexin type 9) inhibitor inclisiran.


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