The U.S. Food and Drug Administration has approved Sanofi's diabetes drug Toujeo (insulin glargine injection, 300 U/mL). The drug is a once-daily long-acting basal insulin indicated to improve glycemic control in adults living with type 1 and type 2 diabetes. Toujeo is expected to be available in the U.S. at the beginning of second quarter of 2015.

The approval of Toujeo was based on FDA review of results from the EDITION clinical trial program, which was comprised of a series of international Phase III studies evaluating the efficacy and safety of Toujeo in more than 3,500 adults from broad and diverse diabetes populations (type 1 and type 2). In the clinical trial program leading to approval, once-daily Toujeo was compared to Sanofi's once-daily Lantus (insulin glargine injection, 100 U/mL).

Lantus, the most prescribed insulin drug in the world, is scheduled to lose patient protection this month, and is the subject of a legal battle between Sanofi and Eli Lilly. http://www.fiercebiotech.com/story/sanofi-blocks-eli-lillys-biosimilar-lantus-goal-line-buys-time/2014-01-31

"Nearly 50% of people living with diabetes remain uncontrolled,"said John Anderson, MD, internal medicine and diabetes specialist, Frist Clinic of Nashville, and past president of the American Diabetes Association."Despite the proven efficacy of insulin, ensuring effective titration and maintenance can be a challenge for both patients and healthcare professionals due to hypoglycemia concerns. Toujeo provides a new option that may help patients manage their diabetes."

All studies of the EDITION program successfully met the primary study endpoints by demonstrating similar blood sugar control with Toujeo as compared to Lantus.The most common adverse events (excluding hypoglycemia) reported for Toujeo included nasopharyngitis (12.8% in type 1 patients and 7.1% in type 2 patients) and upper respiratory tract infection (9.5% in type 1 patients and 5.7% in type 2 patients).

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NxStage Kidney Care Inc., a subsidiary of NxStage Medical, Inc. has opened two dialysis centers in the suburbs of Boston. Located in Wakefield and Norwood, the centers offer multiple therapy options using the NxStage System One, including home hemodialysis, home nocturnal hemodialysis, flexible in-center hemodialysis, and short-term respite care, with schedule flexibility to meet the health and lifestyle needs of the patient. The centers also offer peritoneal dialysis therapy. All NxStage Kidney Care centers offer home dialysis training that is customized to meet the needs of the patient.  

"Our focus is on putting the patient first. By listening to our patients' needs and priorities we develop personalized education, training and flexible treatment plans that provide high quality care," said Dr. Christopher Ying, medical director at NxStage Kidney Care in Wakefield. Ying is affiliated with Lahey Hospital & Medical Center and Tufts School of Medicine. "We help our patients choose a dialysis therapy that best meets their health and lifestyle goals, as well as their desire to do dialysis when and where they want, including while they are sleeping." 

NxStage Kidney Care has centers in Florida, Illinois, Maryland, Massachusetts, Missouri, Ohio, and Pennsylvania.

"As nephrologists we want our patients to have the best care, access to the best treatment, and have the best quality of life," said Dr. John Danziger, medical director at NxStage Kidney Care in Norwood. Danziger is an attending physician at Beth Israel Deaconess Medical Center and an assistant professor at Harvard Medical School. "I am excited to offer patients dialysis options that will provide them as much convenience as possible."

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NxStage Medical Inc. reported that revenue for the fourth quarter of 2014 increased 15% to $79.9 million, compared with revenue of $69.5 million in the same quarter last year. Revenue for the full year increased 14% to $301.5 million, compared with revenue of $263.4 million in 2013.

The increases in both periods were driven by outperformance in the System One segment, which consists of home dialysis and critical care, according to NxStage.

Home dialysis revenue increased 19% to $157.8 million for the full-year 2014, compared with revenue of $132.9 million for the full-year 2013, exceeding the company's target for 15% annual growth. Home revenue increased 21% to $42.5 million in the fourth quarter of 2014, compared with revenue of $35.1 million in the fourth quarter of 2013, exceeding the top end of its recent guidance.

Critical Care revenue increased 27% to $55.6 million for the full-year 2014, compared with revenue of $43.8 million for the full-year 2013. Revenue in critical care increased 31% to $15.2 million in the fourth quarter of 2014, compared with revenue of $11.6 million in the fourth quarter of 2013.

The company's in-center dialysis segment revenue fell almost 4% to $78.9 million for the full-year 2014, compared with revenue of $81.9 million in 2013. Fourth quarter 2014 revenue fell more than 5% to $19.5 million, compared with $20.6 million in the fourth quarter of 2013.

Net loss attributable to NxStage Medical, Inc.'s stockholders was $23.9 million for the full-year 2014, compared with a net loss of $18.6 million for the full-year 2013. Net loss was $4.9 million for the fourth quarter of 2014, compared with a net loss of $5.2 million for the fourth quarter of 2013.

NxStage Medical, Inc.'s net loss for both the full-year and fourth quarter of 2014 was better than its guidance and included $14.6 million and $4.5 million, respectively, in anticipated losses from operations from the Company's Services segment

"Our strong fourth quarter results capped a year of solid growth and execution for NxStage," said CEO Jeffrey H. Burbank.  "We delivered on our key goals for 2014, exceeding our target of 15% annual growth in the Home, advancing our growth strategy and extending our market leadership with yet another first-ever indication, home nocturnal hemodialysis. Our priorities for 2015 remain the same: 15% annual growth in the Home, strong top-line growth, and progress toward sustainable operating profitability. As we look beyond 2015, we believe we are well positioned to capitalize on the tremendous market opportunity with the System One. With an innovative pipeline that includes, among others, our peritoneal dialysis system and our next generation hemodialysis system, we intend to extend our reach to a much larger patient base across the broader chronic and critical care dialysis markets. We look forward to bringing these revolutionary innovations to the market to improve the standard of renal care for patients and deliver higher value to our shareholders."

The Company is forecasting revenue to be between $324 million and $328 in 2015, and between $77.5 million and $78.5 million for the first quarter of 2015. The company also expects a net loss in the range of $20 million to $24 million for the full fiscal year 2015, and a net loss in the range of $6.5 million to $7.5 million for the first quarter of 2015. NxStage said the majority of the company's projected net loss in both periods will be related to its investment in NxStage Kidney Care, which opened two new dialysis centers in the Boston area this month.

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NxStage Medical's home dialysis treatment offers convenience. Source: NxStage.

The incidence of chronic kidney disease and diabetes has risen sharply in the U.S. in recent years, and that has required many Americans to start receiving dialysis treatments. Traditionally, those diagnoses required patients to visit specialty dialysis treatment centers, creating the hassle of having to schedule treatments multiple times per week. Yet NxStage Medical (NASDAQ: NXTM  ) set out to change the way that dialysis patients manage their medical condition, with its System One home dialysis machines offering an alternative to repeated visits to treatment centers.

Coming into Thursday morning's fourth-quarter report, NxStage investors had high hopes that the company would continue to move forward with its growth efforts, and they remained patient even given that profitability remains far in the company's future. NxStage's results showed solid sales gains that encouraged many investors, and the home-dialysis specialist sees a bright future ahead. Let's take a look at NxStage Medical's latest results and see what it believes 2015 will bring.

NxStage brings growth home in 2014
NxStage Medical reported record levels of revenue in the fourth quarter, with sales of $79.9 million rising 15% from the year-ago quarter. The company still lost money, but NxStage's net losses narrowed to $4.9 million, down from $5.2 million in last year's quarter and topping the company's own guidance for its bottom-line results. The loss of $0.08 per share was $0.02 better than those following the stock were looking to see.

Drilling down on the quarterly results for NxStage's different lines of business, Home revenue was especially strong, rising almost 21% to $42.5 million. System One was an essential component of that growth, as it remained the only portable system that the FDA has specifically cleared for home hemodialysis both during the day and at night. NxStage also saw big gains in its Critical Care segment, with a 31% jump in revenue during the quarter. By contrast, NxStage's In-Center segment saw sales drop 5%, but that was consistent with the company's guidance as NxStage has focused more on its home-based treatment options.

CEO Jeffrey Burbank. Source: NxStage.

For the full year, NxStage's results also looked strong. Sales growth of 14% came largely from a 19% jump in Home-related revenue, and Critical Care finished the year with sales up 27% from 2013. Losses of $0.39 per share, while wider than 2013's loss, were better than NxStage's previous guidance.

Founder and CEO Jeffrey Burbank celebrated the results. He characterized 2014 as a year in which NxStage met many of its key goals, including "extending our market leadership with yet another first-ever indication, home nocturnal hemodialysis."

Will NxStage stay healthy?
But NxStage isn't coasting on its past success. As Burbank noted, NxStage's pipeline includes not only a next-generation system for hemodialysis but also systems to provide peritoneal dialysis as well. He believes that NxStage can "extend our reach to a much larger patient base across the broader chronic and critical care dialysis markets," and thereby improve standards of kidney care across the healthcare industry.

NxStage also offers clinic-based solutions. Source: NxStage.

NxStage's guidance for 2015 reflects this optimism: Sales of $324 million to $328 million would represent 7.5% to 9% growth for the full year, and that range is above what those following NxStage had expected to see this year. At the same time, though, NxStage admits that it still won't achieve profitability in 2015, with expectations for net losses of between $20 million and $24 million. Still, CFO Matthew Towse did say that he expects NxStage to start posting positive operating income on a quarterly basis before 2015 is out, and smart cash management should leave investors less worried about the need for dilutive financing in the company's future. With most of the losses stemming from the company's investment in NxStage Kidney Care, its services segment, the future prospects for its products will remain a key driver towards sustainable profitability.

NxStage doesn't have the dialysis market to itself, with plenty of competition from established clinic-based providers. Yet with its home-based dialysis equipment, NxStage Medical has the potential to transform the way that patients needing dialysis live. If it can demonstrate that value proposition to patients, then NxStage has plenty of upside potential in 2015 and beyond.

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