“The Medicines Company (MDCO Nasdaq) primarily markets and distributes drugs for blood pressure, clotting and cholesterol management for routine and surgical use. Medicines sold in the U.S. include Angiomax, Argatroban injections and Cleviprex. Angiomax is globally marketed under the Angiox brand and delivers 92% of the company’s total revenue.
"[The company] reported a 23% increase in Net Revenue to $155.8 million from $126.6 million on higher sales prices and higher unit volumes sold. Ninety-two percent of the company’s Net Revenue came from Angiomax which saw a 13.3% increase in sales to $142.9 million on price increases effective January 1, 2013, and higher sales volumes worldwide. The company commenced Recothrom sales on February 1, 2013, and should see higher revenues in future quarters. ... In May 2013, the company announced that its Recothrom drug was the first and only topical Thrombin approved for use in babies over a month in age. This opens up a significant new market for Recothrom as there are tens of thousands of pediatric surgical procedures carried out each year, in the U.S. and abroad. ...
Valuation
“Shares currently trade at a reasonable valuation based upon cash flow and increasing revenues streams. Angiomax continues to shine as the company’s core product. And the company’s debt is at about the same level as cash and cash equivalents. Free cash flow is expected to improve after the one-time charges are reflected in hindsight. The company has good products and a strong pipeline for acute care drugs in surgical and hospital applications and could turn into a solid cash generator. Debt or a stock buyback are anticipated in 2014 if the product line develops. This is per recent management discussions and the 1Q presentation. We currently own this position based upon the product line. Revenues and earnings are anticipated to improve and grow. The company is expected to earn $1.20 per share in 2013. The earnings are expected to be $1.45 per share in 2014.”
Todd Johnson, Dividend Lab, www.dividendlab.com, 505-514-0036, 6/3/13