AMAG Pharmaceuticals's CEO Discusses Q4 2013 Results - Earnings Call Transcript

Feb. 6.14 | About: AMAG Pharmaceuticals, (AMAG)

AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)

Q4 2013 Earnings Conference Call

February 06, 2014 08:00 am ET

Executives

Amy Sullivan – Vice President, Investor Relations and Corporate Communications

William K. Heiden – President, Chief Executive Officer

Frank E. Thomas – Executive Vice President and Chief Operating Officer

Analysts

Chris Raymond – Robert Baird

Joseph P. Schwartz – Leerink Partners LLC

Geoff C. Meacham – JPMorgan Securities LLC

Eun K. Yang – Jefferies LLC

David Friedman – Morgan Stanley

Carol Werther – Summer Street Research Partners

Operator

Thank you for standing by and welcome to the AMAG Pharmaceuticals Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions].

I would now hand the conference over to Amy Sullivan. Thank you, please go ahead.

Amy Sullivan

Thank you, Sarah [ph]. Good morning, and welcome to the AMAG Pharmaceuticals conference call to discuss our fourth quarter and full year and financial results. We issued a press release announcing our results this morning. In that release we also provided our business and financial guidance for 2014. For those of you that don’t have a copy of the release you can access it from the Investor section of our website at www.amagpharma.com.

Before proceeding with this call, please be reminded that any statements we make during the course of this conference call that are other than historical facts are forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. We want to emphasize that these forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Please refer to our recent filings with the SEC for a full review of the risks and uncertainties associated with our business.

Let me quickly run through the topics who will cover this morning. Bill Heiden, our President and CEO who will review the highlights for the year our commercial performance, expansion opportunities and our goals for 2014. And Frank Thomas, our Chief Operating Officer, will discuss our financial results and provide the guidance for 2014. After our prepared remarks we will open the call for Q&A. Scott Holmes, our Chief Accounting Officer is also with us this morning and he will be available during the Q&A session.

I’ll now turn the call over to Bill.

William K. Heiden

Thanks Amy, and I’d like to also extend the welcome to those of you who have joined us this morning. At AMAG we started 2013 with a very strong base and with a accomplishments of this past year, I believe that base has gotten even stronger.

We got a 60% commercial team of key relationships and hospitals and office space, hematology and oncology clinics, a strong balance sheet with over $200 million in cash and experienced and result-oriented leadership team, and that strong base supports Feraheme. The four green blocks that represent a distinct commercial opportunities that we’ll discuss in a few moments.

And we’re adding products through a very active business development effort, our first accomplishment was the in-licensing MuGard, a unique cancer supportive care product, leveraging our established relationships with oncologists who we already call on for Feraheme. And our plan is to continue to add commercial products to the portfolio through our ongoing business development efforts. So let’s jump right in and start with the successes of 2013.

In summary, it was an outstanding year financially for AMAG, U.S. Feraheme revenues grew 28% and remember, this is a product that was launched five years ago. Operating expenses once again, lower than prior year and combined this performance allowed us to continue to close the revenue expense gap and dramatically reduce our net loss versus a year ago. The positive financial results were driven by a record-breaking Feraheme performance including 20% growth in physician demand that’s IMS reported numbers which is a testament to the strength of our entire commercial organization.

For the year, we grew 13% faster than the market in a market that grew almost 7%, faster than any year since launch. This volume growth multiplied by increasing net revenue per gram, resulted in the outstanding revenue numbers that we’re reporting today. It was also a big year for Ferumoxytol Publications, as we published and presented all of our IDA clinical data including patient outcome data. We also added MuGard to our portfolio in 2013 which is a nice compliment to Feraheme. Earlier this week, I spent a day in the field with one of our sales professionals and it was great to see firsthand a high-level of physician and their support for Feraheme as well as the growing interest in MuGard.

In 2013 we added some outstanding new executives to the AMAG leadership team, we strengthened our commercial organization and our medical teams with several new hires and early this year added a Senior HR Executive to our ranks.

I do want to mention this morning that our current Head of Commercial Operations, Greg Madison is leaving AMAG to pursue another opportunity. I am sorry to see him go and we wish him all the best. I can also announce that we have a new commercial lead joining our team to take his place. Our new Head of Commercial is an executive who I worked with in the past, who I trust and respect immensely and I look forward to speaking more specifically about his background once he has been able to arrange his departure from this current organization. With a strong base of business in place and business development efforts progressing nicely, we took the opportunity this past year to step back and develop a five-year strategic plan which has three main pillars, growing, building, together. And I may be talking more about that.

But first, let me tell you a bit more about our 2013 successes and I’ll turn it over to Frank to do so.

Frank E. Thomas

Thanks Bill. Slide 5 really depicts the progress we made in 2013 to reinvigorate the growth of Feraheme. On the left, quarterly 2012 ex-factory sales are shown in blue and on the right-hand side of the chart quarterly Feraheme sales for 2013 are shown in purple. You can see here the acceleration in the growth trajectory of Feraheme in 2013 as compared to 2012.

For the past eight quarters we’ve been taking smaller periodic price increases to help reverse in historical deteriorating net revenue program for Feraheme. It took a couple of quarters for the full impact of this new pricing strategy to show through in the numbers, but now it is contributed to the higher growth rate that we’ve seen in our performance since the beginning of 2013. You can see from the chart that we realized 6% growth in Feraheme revenue as a result of price and about 22% from increases in volume.

Focusing on fourth quarter results for a second, the growth rate was also impressive at 32% over the fourth quarter of 2012. This growth in Q4 is particularly noteworthy as the IV Iron market tend to be a little soft during the fourth quarter due to some seasonality.

For those of you who follow AMAG, you may recall that we issued original guidance at the start of 2013 forecasting to $63 million to $67 million, of total U.S. net Feraheme revenue along with some other guidance which would have landed up at between $206 million and $211 million in cash at the end of the year. We updated our guidance twice during 2013, and I’m pleased to report today that we met or exceeded every financial metric that we established at the beginning of the year.

Total revenues for 2013 were nearly $81 million, compared to $85.4 million in 2012. If you exclude the positive impact of some one-time milestones, and some other changes and estimates total revenues would have grown approximately 42% in 2013. This growth in total revenue was due to the outstanding performance of Feraheme with $71.4 million of U.S. net Feraheme sales in 2013. As I mentioned previously, the growth in Feraheme revenues was due to both significant increases as well as increases in price.

Across the Board on the expense front we made great progress in 2013. Cost of goods sold decreased from 24% of net Feraheme sales to 17% of net Feraheme sales. And operating expenses decreased by another 7%. The operating expense decrease is also noteworthy given that it has come down by about $50 million per year since 2011.

During that period, we’ve really right-sized AMAG for the CKD opportunity that we have today and I believe we’re very well positioned for the future. The top line growth coupled with reduced expenses drove a significant 43% improvement in our net loss on a GAAP basis.

If you strip out them from the non-cash expenses including depreciation, stock-based and contingent consideration expenses related to our MuGard license, our adjusted net income for 2013 was a positive $2.3 million. We believe stripping out these non-cash expenses gives us a better view of the potential for the business to generate positive cash flows in the future. Solid execution lowered our cash need for the year resulting in a significantly higher cash position than we originally anticipated.

With just under $217 million in cash and that include the impact of the $3.4 million cash payment we made upfront at the licensing of MuGard. So we used approximately $10 million to fund our operations in 2013.

I may now turn the call back to Bill to discuss Feraheme performance in more detail.

William K. Heiden

Great, thank you Frank. Our new strategic plan is a fairly comprehensive plan it details operational and financial goals over the next five years.

And in summary, that plan has three core pillars that we’re going to focus on over the next few years. First pillar is growing which captures our plans to optimize the Feraheme opportunity over the next few years. And that includes first, our near-term focus of driving continued growth within our current indicated patient population and then second, focusing on our possible expansion opportunities.

So let’s start with where we are today with Feraheme. Feraheme is an IV iron approved in the U.S. to treat iron deficiency anemia in patients with chronic kidney disease. Feraheme competes for share in the U.S. non-dialysis IV iron market in the primary sights of care for these patients are, hematology, oncology, clinics, hospitals and nephrology clinics, which are the targets of our reps in the field. We are going to see a breakdown in the key segments for 2013 through 2011, and these are IMS volume or grams, so in market position demand.

Historically, the biggest segment of our sales are in hematology, oncology shown in green, where we grew 15% this past year and grew our market share to 26.5%. We’ve done a more intense focus on hospital segment which is shown here in blue during 2013 and we saw the results of those efforts with significant growth, also growing our share in this segment to 10%. This smaller yellow segment contains other customers such as non-dialysis nephrology accounts where we also saw strong growth.

Overall, on the left-hand side 20% volume demand growth which was partially a function with a IV iron market that we help grow in 2013 and in that growing market Feraheme grew 13% faster, which meant we took share from our competitors. And overall, this has led us to a 2013 market share of 15.3% of a market that totaled approximately 850,000 grams in 2013, which compares to a total market of approximately 750,000 grams on the launch of Feraheme in 2009. We launched into the market that hadn’t had seen much promotional activity for a number of years and we’ve been driving market growth and gaining share ever since.

Today Venofer has the largest share of the market for the strong historical presence in hospitals and iron dextran, also known by the brand INFeD which has a strong presence in hematology and oncology due its broad label of CKD and non-CKD IDA. The newest interim Injectafer was approved in July 13 and through the first six months on the market has gone to less than 1% of the market. I believe this is due to a variety of reasons including a temporary J-Code which makes reimbursement a bit more challenging and slower. We also think that the attributes of Feraheme provides important clinical benefits for physicians and patients. We’re currently approved to treat IDA associated with CKD and so we compete for about half of this IV Iron market and that represents approximately 425,000 grams or $250 million revenue opportunities for Feraheme.

Again IV Iron is administered primarily in hematology, oncology, clinics or hospitals only have a strong commercial presence and a growing market share. And this is the opportunity today. So our 15% share of the total market translates to about a 30% share of this market in other words, we don’t have two-thirds of our currently indicated market. So we believe that there is room to grow and this is just what our commercial team is focused on doing in 2014. So let’s talk a bit about our efforts to access the other half of the market.

On January 21, 2014 we received a complete response letter from the FDA regarding our supplemental to drug application for Feraheme. In the CRL the agency stated that we have not provided physician information to permit labeling of Feraheme for safe and effective use for the proposed broad iron deficiency anemia indication. We continue to believe that the approval of Feraheme sNDA will provide physicians with an important treatment options for patients with IDA, who have failed or could not tolerate oral iron. And while we don’t agree with the decision, we intend to work with the FDA to determine the optimal path forward for Feraheme one that is responsible to the agency’s request and economically efficient for AMAG. We expect to be able to announce more on that path forward as our plans and discussions with the FDA evolved this year.

And we believe it’s the value of IDA opportunity is significant, regulatory approval allow us to leverage our strong relationships with physicians and their treated patients with IDA, CKD we’ve got five Orange Book listed patents and other proprietary knowhow and the other opportunity is large. In fact we believe that regulatory approval for IDA would double the market opportunity from our current addressable market of $216 million to a total of more than $500 million annually.

The good news that if we seek and receive regulatory approval this market has served by the very same physicians that we call on today and who use Feraheme in IDA and CKD patients. So there wouldn’t be a need for a big expansion of our commercial footprint indeed we could leverage existing relationships.

We believe that the current the IV Iron market shown in blue is really just the tip-of-the-eye expert and that there is significant opportunity for growth of this market, because there are approximately 4 million patients in the U.S. already diagnosed with iron deficiency anemia most of whom are first put on oral iron. And it’s an appropriate initial step, but many patients fail oral iron, left untreated these patients continue to live with the signs and symptoms of anemia which may include crippling fatigue and headaches.

It’s interesting to note that these 4 million patients include IDA associated with CKD, shown here in orange for which Feraheme has indicated today. Also we showed the non-CKD patients in yellow. And so, where are these patients. Many of these not yet treated with IV Iron patients with CKD are under the care of an nephrologists or an oncologists physicians that we call on today with our existing sales force. We also had expansion opportunities for Feraheme outside the U.S.

Our partner Takeda has launched Rienso in several countries in Europe and is making good strides with pricing and reimbursement. While royalties today from Takeda had been modest, we do have a significant milestone payment due should they receive approval for the broad IDA indication in Europe. And that decision is currently expected in the second half of this year.

In addition to the milestone, we’ll continue to receive tiered double-digit royalties on sales in all of Takeda’s territories.

So, that Feraheme and Rienso. Now I’ll jump to MuGard which we began promoting in late 2013. MuGard is a unique prescription oral rinse used to manage oral mucositis one of the most common side effects of cancer chemotherapy and radiation treatments. The opportunity is large with oral mucositis potentially affecting 400,000 cancer patients per year in the United States.

MuGard net revenue prescriptions 6 bottles is approximately a $1000 and so we estimate that the MuGard market opportunity will help $400 million, and therefore every point of market share that we gained would translate into $4 million in additional revenue for AMAG and we are just getting started. So how do we plan to attack this in 2014? First is product differentiation, distinguishing MuGard is something quite unique, smart targeting, focusing on a sub-segment of Feraheme prescriber, and select radiation oncologists and increasing access for patients by expanding insurance coverage.

By the way, these are some of the same strategies that we’ve successfully implemented for Feraheme in 2012 and 2013, resulting in the turnaround from that product. So stay tuned, there are nice synergies between Feraheme and MuGard and I’m confident that our commercial team will pursue MuGard sales growth with the same drive that they apply to Feraheme.

The second pillar of our strategic plan is building. And that refers to the continued buildout of our portfolio of products through our business development efforts. We have a very active FDA effort to evaluate and acquire in-license additional commercial assets. We had a targeted approach to these efforts with a focus on the Bull’s Eye opportunity those that can leverage our current audience, and existing sales force. MuGard is a great example of successful execution of that strategy, a product that will be used by our currently called on oncology, physicians and nurses and a product with significant upside promotional sensitivity and revenue potential.

We’re also looking at strategic transactions in the next few years in the Bull’s Eye. These are products of company opportunities that would be aligned with Feraheme’s growth strategy in the broader IDA market. So specialty products that would be used by a gastroenterologist, or rheumatologist for example, would be a nice fit in this year.

And finally, in the outer ring of the target of the broader set of opportunities that we call more financially-driven transactions and these are opportunities that are driven more from a either a pure cost synergy’s perspective or those that would help optimize our after-tax cash flows. These types of transactions can make a lot of sense, but everything has to align to make something like that happen. So we’re making good process, we continue to evaluate numerous different opportunities passing on many and focusing only on those assets that we believe have the potential for solid future revenues and profitability.

And with that, let me turn it back over to Frank who will review our 2014 financial guidance.

Frank E. Thomas

Today we’re issuing our finance guidance for 2014. There are similar assumptions that are included in this guidance that I will point out as we go through each line item.

Starting with total revenues, we expect between $88 million and $100 million for 2014, including between $75 million and $85 million of the U.S. net Feraheme sales. For Feraheme, we are anticipating continued growth in 2014 within our existing indication. As you break this down on a quarterly in basis, we would encourage you to think about the seasonality of the IV Iron market and compare versus the same quarter a year ago, first quarter against first quarter last year for instance.

Additionally, we anticipate that on a quarterly basis Feraheme product revenues will follow a similar patent to what we experienced in 2013 and what we have shown on Slide 5 earlier. We did a wide revenue range for 2014 to factor in some of the variables that could come into play over the next year. Our expectations for Feraheme acknowledged potential competitive pressure, which may result in a deceleration of the growth rate. The competitive environment could create pricing pressure on our net revenue per gram for Feraheme in 2014. However on the positive side, we believe that more promotional activity will lead to increased market growth and partially offset any pricing pressure. You will closely monitor any changes in the competitive landscape and plan to respond accordingly.

Other revenue consists of sales of MuGard, Feraheme ex-US product sales and royalties as well as milestone revenue from our ex-U.S partnerships. All of which are expected to grow over the corresponding figures in 2013.

Moving on to expenses. We anticipate continued improvements in Feraheme costs in 2013 and has set the range at 14% to 16% of sales as the volumes of Feraheme and Rienso continued to grow globally.

Operating expenses are expected to be relatively flat for 2014 at $80 million to $85 million. Of that, R&D is expected to be between $20 million and $22 million and SG&A makes up the balance between $60 million and $63 million. This expense guidance does not include any development expense related to the broad IDA opportunity in the U.S. but we will update its statutory once we have more clarity with the FDA and the path forward.

Given that expenses are roughly flat and revenues or forecast that continue to rise, we’re guiding to be cash flow and net income break-even for the year, excluding the impact of any business development transactions. Of course with the Takeda milestones and the broad IDA approval in Europe, our cash flows and net income would be significantly positive for the year.

So with that I’ll turn the call back over to Bill for some closing remarks.

William K. Heiden

Thanks Frank. That the base business is coming off a very strong year we are well positioned to continue to build across the list of ambitious business goals in 2014. Feraheme we delivered very strong in the U.S. as such and our goal is to continue to drive markets and market share growth within our current IDA, CKD indications. We made excellent progress optimizing net revenue program in 2013 an area that we will continue to focus on in 2014 and still look to grow over 2013.

There is a significant opportunity to expand the IV Iron in CKD patients by increasing the treatment of oral iron failures specifically within nephrology and oncology where we have already have a commercial presence.

Potential label expansion and on the horizon in EU with Takeda expecting a decision on the broader label, in mid 2014 and in the U.S. we will work over the coming months to define the regulatory path forward for the sNDA.

MuGard provides a nice addition that will contribute to revenue growth in 2014, business development remains at high priority activity with AMAG and I remain confident that there are attractive deals to be done and finally, we’ll continue to operate the business with financial discipline maintaining a close eye on operating expenses with a goal of meeting or as feeding our financial guidance for the year.

And with that, we’ll open it up for questions.

Question-and-Answer Session

Operator

Thank you. (Operator Instructions) please limit your question to one and one follow-up. Your first question comes from Chris Raymond from Robert Baird.

Chris Raymond – Robert Baird

So yes, I’m sure you guys may be don’t have a good answer here but I have to ask. In terms of your communication with FDA since the call last month that any more color here from what the agency’s thinking or have you actually met with them directly on this?

William K. Heiden

Chris, no right now it’s been about either internal work or working with external experts and mapping out sort of a multi-pronged approach to resolve this.

So we have now the next most likely the formal step of the agency would be a formal post-review meeting, but obviously we want to get our production order when we go to the agency we’ve got a plan mapped out and suppose it is, we could make to the agency. So nothing in the last couple of weeks in terms of interactions directly with the agency, a lot of work on going here at AMAG.

Chris Raymond – Robert Baird

Okay great. And then just a related question as follow-up. So I know you guys touched on excluding any guidance or any spending guidance from this broad IDA development on purpose, but may be just a little color here is this sort of just because you are waiting to understand exactly how big these trials or is this because perhaps there’s a question about whether you’d actually start that from this year?

William K. Heiden

So there is still questions about how large a trial would be if we decided to do a trial. Do we actually need to do a trial? What can we negotiated with the agency? Pursuing to your point you think about the size of trial, we have done some preliminary work looking at sizing of the trial. First blush it looks like it’s something that’s if we were to pursue a multi-safety endpoint study it’s manageable we could do in a reasonable timeframe. And given the value of the IDA opportunity we would pursue. But we still need to have some discussions both internally to understand what do we think as a reasonable proposal and then further discussions with the agencies come to an agreement.

Chris Raymond – Robert Baird

Great, thanks.

William K. Heiden

Thank you Chris.

Operator

Your next question comes from Joseph Schwartz of Leerink Partner.

Joseph P. Schwartz – Leerink Partners LLC

Hi, good morning. Thanks very much. I was wondering just to follow-on the last question if you could give us a sense of how expensive of an undertaking would not be interesting for AMAG in terms of R&D efforts to extend the label, because if you said you’ve been evaluating a lot of other business development opportunities, which might be accretive and strategic and leverage the business as well. How are you thinking about the balance of obviously wanting to extend the label, but also just expanding the business in other creative ways?

William K. Heiden

They are running in tandem Joe, so the business development is on one track and we are looking a lot of interesting opportunities. In terms of IDA, we’re committed to this product. We’ve treated almost – there is almost 1 million patient exposures, we are very comfortable with the efficacy and safety profile of Feraheme we run two large clinical trials that demonstrated the efficacy and safety in the IDA patient population. And so for me, we’ve done some analysis looking at the value of the IDA opportunity in the U.S. is significant. First blush, one of the analysis we did show the study 1,200 patients a couple of years $25 million, $30 million. So that’s an opportunity that we would certainly go after, I’m not sure we need to do something that’s large yet, we haven’t discussed with the agency. But I think we can do both, I think we can continue to pursue the IDA opportunity and aggressively pursue business development opportunities.

Joseph P. Schwartz – Leerink Partners LLC

Okay thanks. And then on the European front, is there anything that you can say to give us a sense of how you think that’s going with various drug to indicated the efforts to drug and label their relative to how it’s done in the U.S.?

Frank Thomas

Hey, Joe it’s Frank. Yes, so Takeda filed the Type II Variation last summer. I know that they’ve been in good dialog with the EMA, and the timeline as we sort of laid out here that they expect to have a decision hopefully in the middle part of this year, and of course with that decision would be a positive decision on the broad IDA opportunity a fairly significant milestone for AMAG. We continue to receive royalties on the product today and obviously, we think that with the broad IDA opportunity that royalty stream becomes even more meaningful.

Joseph P. Schwartz – Leerink Partners LLC

Okay, thank you.

Operator

Your next question comes from Geoff Meacham of JPMorgan.

Geoff C. Meacham – JPMorgan Securities LLC

Hi, good morning guys and thanks for taking the question. Frank, you mentioned your pricing you guys about a year ago were able to put through some price increases for Feraheme. So, the question is how sustainable do you think this is going forward and what is anything as a spend in your guidance and I have a follow-up?

Frank Thomas

Sure. So as we mentioned in the prepared remarks, we were very successful last year. I think we took about 12% to 14% in gross price increases and we were able to realize about half of those price increase to our net sales number. And our strategy we think it’s been sound, both from a pricing perspective as well as our contracting strategy we’ve been able to continue to grow share and realize the price appreciation. As we head into this year, I think we do believe with the competitive entrants in the mix now that we’re going to have to closely monitor the situation. We think our strategy is down and we continue to work through that. There are lot of variables though and we said that. And so I think we tried to be a bit conservative on our guidance for the year and provide a bit more of a wider range going through the year, but I don’t expect right now these any major shifts in our approach to the market. We want to continue to sell on the clinical benefits of the product and in clinics where they used Feraheme we’ve had great support.

Geoff C. Meacham – JPMorgan Securities LLC

Okay. That’s helpful. And then, Bill, on the break-even guidance I wanted to sort of get a sense from you as in terms of how much of a priority this is. Kind of going up with the last question how do you balance the break-even versus does that opportunities or may be even increased spend to help continue to gain share? Thanks

William K. Heiden

It’s a great question. The break-even is not necessarily a goal that we must achieve that’s how the number shook out when we looked at the sales opportunity and our current expense guidance. But certainly we wouldn’t hesitate to embark on a interesting business development opportunity that’s going to create long-term value for shareholders, we wouldn’t hesitate to continue to invest in Feraheme if the opportunity seems reasonable and measured for us.

So, I think today as we sit here, it looks as though we will achieve break-even for the year potentially significant profit, if we achieve milestone for EU approval in Europe. So I guess in short I’m willing to give on profitability believe the additional opportunities both for our existing products, but also new products to bring into the mix and expand the portfolio.

Geoff C. Meacham – JPMorgan Securities LLC

Okay, thanks.

Operator

Your next question comes from Eun Yang of Jefferies.

Eun K. Yang – Jefferies LLC

Well, thank you. For U.S. as Feraheme’s sales guidance for this year what’s the growth from net discount that you assume. Also why was the discount rate exceeding last year as well?

Frank E. Thomas

The second question I didn’t catch.

Eun K. Yang – Jefferies LLC

So, yes gross to net discount assumption for this year and what was the last year on average and at the end of last year as well?

Frank E. Thomas

So I think we exited 2013 at a gross to net of about 42%, but it really, we have tried to really re-focus people externally and even internally on net revenue per gram, because there are situations where we may take a gross price increase and if we contract some of that gross price increase back, the gross to net may actually go up, but as long as we realized more revenue per gram, we benefit across the entire business.

So gross to net has continued to rise, but I think we don’t believe that’s the best metrics to look at in terms of how to monitor progress in the business. In terms of revenue per gram going into next year, I think, we don’t want to get into too specific of guidance around that, I think, obviously there’s competitive dynamics that we want to make sure that we will keep proprietary some of the information. But our guidance reflects $75 million to $85 million for the year, which at the midpoint is about 12% growth rate and we’re going to do everything we can to continue to grow the brand in our existing indication.

Eun K. Yang – Jefferies LLC

Thank you. Can I have a follow-up question? Do you know when Venofer is going generic?

Frank E. Thomas

People have talked about generic Venofer in the U.S. for quite some time. I think the molecules have been offset since 2008 and there’s been several attempts I believe to try to develop a generic. But, today nobody has been successful at doing that and we think it speaks to a broader question of within the IV Iron market about how does a company go about establishing bio equivalents for any of these molecules. So, I don’t have any specific details any more than you might, but I can say that it seems like it’s been on the radar of a number of companies and nobody yet has been successful at getting a generic Venofer approved in the U.S.

Eun K. Yang – Jefferies LLC

Thank you.

Bill K. Heiden

This is Bill, just a follow-up on that, you may be aware that the FDA is sponsoring a study of the only generic IV Iron Nulecit and Ferrlecit, so that seems to be a question in the regulatory authority’s minds about bio equivalents standards, so I think this will be an interesting area for us to continue to follow.

Operator

As a reminder [Operator Instructions] Your next question comes from David Friedman of Morgan Stanley.

David Friedman – Morgan Stanley

Hey guys, thanks for taking the question. Just two quick ones, the first is, I guess can you or are you willing to disclose your price per gram for 4Q? And then the second question is, just more conceptually on business development I think part of what you guys have looked at is, business development in areas where you had potentially expected some IVA expansion. So I guess I was just wondering are those areas such as GI, off the table as far as business development goes, or would you consider price deal that may essentially lead the IDA opportunity potentially?

Frank E. Thomas

So I’ll take the first, this is Frank. The net revenue per gram for Feraheme in the fourth quarter was about $555 per gram. It’s worth probably mentioning though that quarter-to-quarter that can be quite variable depending on a number of things, mix of business, contracting. So it was a very positive quarter for us in Q4 and that obviously resulted in the 6 percentage points of the growth coming from price in 2013. So, it was our strongest quarter really for quite some time.

Frank E. Thomas

With regards to the question of our business development focused clearly the bull’s-eye is oncology and hematology in hospital where we have the presence today. We are still looking at opportunities in that second ring, we’re committed to continuing to pursue the broader IDA label in the U.S. and so it’s really question I think of timing, and I’ll tell you some of the opportunities we’ve looked at for example in these second lien space as our opportunities but really on a stand-alone basis have justified financially and it provide that additional strategic interest for us longer-term with Feraheme.

I have also mentioned that in several of these segments GI is a good example our data shows that there are many patients who have iron deficiency anemia associated with CKD. And so even within our current indication there is an opportunity for market expansion in some of these associated physician specialties. And so for all those reasons we will continue to look at opportunities in that second ring.

David Friedman – Morgan Stanley

Thank you.

William K. Heiden

Thanks David.

Operator

Next question comes from Carol Werther of Summer Street.

William K. Heiden

Hi Carol.

Carol Werther – Summer Street Research Partners

Yes, so I just have a couple of questions. One is, again about Europe I mean, and first of all Europe and what Takeda has told you about the development of getting the broader label there and the second is about the feedbacks from your consultants here in the U.S. and what you might be able to do to reverse the FDA’s position of doing another trial?

William K. Heiden

So starting with Europe, it seems like their review is progressing as expected, but I don’t want to get into too much detail out of respect to our partner Takeda. They’re leading the charge there, they’ve done a nice job to-date. Obviously they’re commercializing the product in CKD indication and it is important probably point out that the IDA label in Europe is important for them, obviously there is a significant milestone they’ve attached to it. But may be just as importantly in the competitive environment in Europe is a little bit different than here in the U.S. because most of the iron over there have the broad label. So to some extent they’re at a competitive disadvantage today and with a broad IDA of label, it really I think put them on par with the other iron. So we’re very pleased with the progress that’s been made for targeting a mid this year approval and I know Takeda is excited about getting the broader label.

Frank E. Thomas

And Carol, to your second question, the external experts that we’re talking about are not only medical and scientific expertise, but also regulatory experts, and we’re really exploring methodically of approaches that we could use to respond to the FDA’s concerns. And so, part of this is looking at studies, part of this is looking at other data, part of this is looking at how global regulatory authority are looking at IV irons. And so, it’s a lot of different experts that we’re getting inputs from that we’ll consolidate our approach and proposal to the FDA. I can’t give you much more specifics about at this point in time, but we’ll certainly keep those abreast as we make progress during the year.

Carol Werther – Summer Street Research Partners

Thank you.

Frank E. Thomas

Thank you Carol.

Operator

There are no further questions. I will now turn it back to Bill Heiden.

William K. Heiden

Thank you, very much. We’re certainly proud of the accomplishments and achievements of 2013. We look forward, we’ll establish a set of ambitious goals for 2014, and we are already aggressively pursuing those goals targeting to meet or beat the objectives that we set for ourselves. And we look forward to updating you all on our progress throughout the year. Thank you very much.

Operator

This concludes today’s conference. You may now disconnect.

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