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The Medicines Company May Sell European Business As Management Focuses Inward

Written by: | news@biospace.com | Dated: Friday, June 26th, 2015

Parsippany, N.J.-based The Medicines Company (MDCO) is considering selling its European business, Bloomberg News reported this week, and is working with consulting bank Rothschild to evaluate options.

The Medicines Company’s lead product is Angiomax, an anticoagulant that brought in $636 million last year, primarily in the U.S. It is marketed in Europe as Angiox. Earlier this year the European Commission approved three of the company’s drugs, Kengreal (cangrelor), an anticoagulant, Orbactive, for skin infections, and Raplixa, which is used during surgery to stop bleeding. PCI is percutaneous coronary intervention.

“The approval of Kengreal provides a new option for PCI,” said Clive Meanwell, chairman and chief executive officer of The Medicines Company in a statement. “The novel drug will potentially decrease thrombotic risk in the acute care setting, deliver value to the healthcare system alongside Angiomax, and help us to increase our commercial offerings in the cath lab.” Keangreal was approved on June 22 by the U.S. Food and Drug Administration (FDA) as an alternative to other blood-thinning medications such as clopidogrel, a generic version of Plavix, a Bristol-Myers Squibb Company (BMY) product.

“In the U.S., the vast majority of PCI procedures are done on an ad hoc basis because clinicians want to define the coronary anatomy prior to making a treatment decision,” said J. Jeffrey Marshall, director of the Cardiac Cathertization Lab at the Northeast Georgia Medical Center in a statement. “Cangrelor provides a benefit because it allows for antiplatelet therapy to be initiated just after the decision for PCI has been made.”

However, Angiomax sale dropped 35 percent to $100.7 million in the first quarter of this year, and could drop even more if a generic version hits the U.S.

The Medicines Company stock has been on a roller coaster ride this last year.

Shares traded for $20.36 on Oct. 13, 2014, rose to $27.96 on Dec. 29, 2014, then dropped back down to $24.63 on Jan. 9, 2015. It then spiked on March 19, 2015 to $31.29 before dropping down to $25.58 on May 7. It is currently trading for $29.94.

Leerink Swann raised its price target on Thursday for the company from $33 to $35, and has it ranked as “outperform.” Analysts at Zacks upgraded from “sell” to “hold” on Tuesday, June 9. Guggenheim analysts set a price target of $42 and gave it a “buy” rating on June 2. RBC Capital analysts kept it at “outperform” and set a price target of $39 on May 9, up from a previous $38.00. And JPMorgan Chase & Co. analysts raised the price target from $31 to $32 and rated it as “overweight” on May 6.

The company will see a dynamic 2015, with several major pipeline “catalysts” and a late-stage pipeline that has been bogged down by regulatory approvals and litigation soon having both those problems solved, Jonathan Eckard, a biotech analyst at Citi, said earlier this spring.

MDCO‘s 2014 revenue beat the Street, at $191 million versus a consensus of $189.8 million and Citi‘s estimate of $188.1 million. Generally accepted accounting principles earnings per share was $0.08 versus a consensus of $0.82 and Citi’s $0.96. So far, the company has no provided any financial guidance for 2015, because investors are wary of ongoing litigation surrounding Angiomax, though that could soon change, said Eckard.

“The focus for MDCO has been on the exclusivity of lead revenue driver Angiomax; however, there are multiple pipeline programs which, if catalysts fall the right way, could change how the Street views the outlook for the company,” he wrote in a note to investors. “While we see several pipeline catalysts with potential to capture broader attention, many are hard to predict with markets that are not well understood. We would like to see some early positive news on any program to gain confidence.”

In the meantime, Eckard predicted that the main focus will likely remain on Angiomax litigation with updates on the current appeal trial likely sometime during mid-year. Early trial results are expected for MDCO‘s drugs ALN-PCS (antisense PCSK9) and ABP-700 (rapid on/off general anesthetic) around mid-year with potential to move the needle for the stock.

 



June 26, 2015
By Mark Terry and Riley McDermid, BioSpace.com Breaking News Staff

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