The Medicines Company (MDCO - Analyst Report) reported a fourth-quarter profit of 27 cents per share, including the impact of stock-based compensation expense. Fourth quarter profit exceeded the Zacks Consensus Estimate of 24 cents and the year-ago loss of 57 cents.

Performance was boosted by higher revenues and lower operating expenses. Revenues, up 17.3% at $119.6 million, surpassed the Zacks Consensus Estimate of $111 million.

Full-year earnings came in at $1.15 per share, in-line with the Zacks Consensus Estimate and well above the year-ago loss of 46 cents. Full year revenues increased 8.3% to $437.6 million, well above the Zacks Consensus Estimate of $429 million.

The Quarter in Detail
Angiomax continued to see strong demand during the quarter with US sales increasing 16.3% to $112 million. US sales benefited from continued demand in hospitals. Moreover, the company reported extra stocking in hospitals ahead of a price increase for Angiomax in Jan 2011. Ex-US sales increased 48% to $7.7 million.

The Medicines Company is working on driving growth in ex-US markets by promoting data on the product. Moreover, Angiox (Angiomax trade name in Europe) has Class I recommendation from the European Society of Cardiology for heart attack patients undergoing percutaneous coronary intervention (PCI).

Angiomax, acquired from Biogen Idec Inc. (BIIB - Analyst Report), is the lead product at The Medicines Company. Acquired in 1996, Angiomax is used as an anticoagulant in patients undergoing coronary angioplasty.

R&D spend declined 36.4% to $31.1 million. SG&A expenses declined 20.4% to $37.4 million.

2011 Guidance
The Medicines Company said that it expects revenues to grow 6-9% in 2011, with 22 - 23% of revenues expected in the first quarter. While R&D spend is expected to be up to 20% of revenues, SG&A spend is expected to be flat to slightly above 2010 levels. The Zacks Consensus Revenue Estimate currently stands at $473 million, representing year-over-year growth of 8.1%.

Pipeline Update

The Medicines Company also provided an update on its pipeline candidates. The company currently has three phase III candidates and two early-stage candidates in its pipeline. The company said that its new phase III study (Champion Phoenix) with Cangrelor is running according to schedule.

Meanwhile, The Medicines Company is hoping to gain approval for the ready-to-use formulation of Argatroban later this year. The Medicines Company said that it has started enrolling patients in a phase III program, SOLO, of oritavancin for the treatment of acute bacterial skin and skin structure infections (ABSSI). Positive results would allow The Medicines Company to file for US approval in 2012.

As far as Cleviprex is concerned, the Medicines Company is yet to resume normal supply of the product. The company had initiated a voluntary product recall in December 2009 due to the presence of visible particulate matter in some vials.

The Medicines Company is currently working on the supply situation and expects to re-launch the product in the second half of 2011. Hospira (HSP - Analyst Report) is working on making validation batches for the US.

Cleviprex (clevidipine) is the only other marketed drug at The Medicines Company that received FDA approval in 2008. Regulatory review in other countries was put on hold with approval not expected prior to the resolution of the ongoing manufacturing issues. The Medicines Company has plans to launch the product across 24 major markets in the 2011-2014 timeframe.

The Medicines Company’s early-stage candidates include MDCO-216 and MDCO-2010. The company acquired worldwide rights to MDCO-216 from Pfizer (PFE - Analyst Report). MDCO-216 is a naturally occurring variant of a protein that could be used to reverse the development of arterial plaque development and reduce the risk of heart problems in patients with acute coronary syndrome (ACS).

If developed successfully, MDCO-216 should fit well within The Medicines Company’s product portfolio. Phase I studies with the candidate are scheduled to commence in 2011.

MDCO-2010, which became a part of The Medicines Company’s portfolio through its acquisition of Curacyte, is a small molecule serine protease inhibitor. Phase II data on the candidate should be out in 2011.

We currently have a Zacks #3 Rank (short-term Hold” rating) on The Medicines Company. We expect investor focus to remain on Angiomax’ uptake and pipeline updates.