Millennium Pharma Lives Up to Flat Expectations - TheStreet

Millennium Pharma Lives Up to Flat Expectations

The company posts flat earnings of a penny a share, meeting estimates.
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Millennium Pharmaceuticals

(MLNM)

met estimates with flat quarterly earnings and raised full-year guidance on an optimistic outlook for oncology drug Velcade.

The company reported a loss of roughly $17.7 million, or 6 cents a share, flat to last year's quarterly results.

Non-GAAP earnings were about $3.3 million, or a penny a share, compared to $3.9 million in the year-ago quarter. This is in line with expectations of analysts surveyed by Thomson Financial.

Overall revenue decreased to $113.3 million from $120.1 million in the year-ago quarter due to a drop in revenue from strategic alliances and royalties. This corresponds to a reduction in cost of sales to $5.4 million from $14.1 million. This was related to the cardiovascular drug Integrilin supply agreement with

Schering-Plough

(SGP)

.

U.S. sales, however, increased 6% to $62.6 million from $58.8 million in the same period in 2006. Millennium's CEO Deborah Dunsire noted in a Thursday morning conference call that the sales increase came despite a decrease in inventory this quarter and an increase in inventory in the year-ago period.

The company's staple product, Velcade, which is approved in more than 80 countries, is being co-developed by Millennium Pharmaceuticals and

Johnson & Johnson

(JNJ) - Get Report

. Millennium is responsible for commercialization of the drug in the U.S., where for a limited amount of time it's co-promoting it with Ortho Biotech.

Janssen Pharmaceutical is responsible for commercialization in Japan, while Janssen-Cilag is responsible for commercialization elsewhere.

"Our enhanced marketing and sales initiatives led to strong growth in Velcade sales performance with a strengthening of our market-leading position in previously treated multiple myeloma patients," said Christophe Bianchi, executive vice president. "We expect increased sales in the near term will be driven by the recent approval of the velcade/doxil combination, repeated use of velcade by patients in multiple lines of therapy and increased use by previously treated mantle cell lymphoma patients."

Looking ahead, the company raised its guidance for velcade sales to a range of $250 million to $260 million, which fits in the top half of the company's original estimation of $240 million to $260 million. It's also increasing its predictions for royalties due to growth in velcade to $150 million to $155 million, from $140 million to $150 million.

It anticipates non-GAAP net income of $20 million to $30 million, compared to the original forecast of $10 million to $20 million, and GAAP net loss of $50 million to $60 million compared to the original range of $60 million to $90 million.

The company said it's on track to have phase III front-line multiple myeloma interim analysis in the third quarter. And pending positive results, the company expects a supplemental new-drug application (sNDA) in the second half of the year.

It's also on schedule to complete enrollment in a phase III pivotal New Hodgkins Lymphoma (NHL) trial in the first half of 2008. This study will evaluate the drug in combination with rituximab compared to rituximab alone in previously treated NHL patients.

Millennium is also looking at treatment opportunities in MS, atherosclerosis and rheumatoid arthritis, among other things.

The company plans to present data on MLN1202, a CCR2 antagonist in multiple scerlosis, at the American Neurological Association meeting in October. And we can expect an update on the next steps for the antagonist based on results from a phase II study.

In addition, it initiated a phase I trial for MLN8237, a second-generation Aurora A kinase inhibitor in advanced-stage cancer patients.

Millennium shares were down 30 cents, or 2.8%, to $10.25 in recent trading.