AMAG Pharmaceuticals Focuses On Product Development & Buyouts

We issued an updated report on AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG) on Jul 4.

Based in Waltham, MA, AMAG Pharmaceuticals, Inc. is a specialty pharmaceutical company and has three marketed products – Feraheme (ferumoxytol), an iron replacement product approved for the treatment of iron deficiency anemia in adult patients with chronic kidney disease (CKD), Makena (hydroxyprogesterone caproate injection), a progestin approved to reduce the risk of preterm birth in women pregnant with a single baby who have a history of singleton spontaneous preterm birth; and MuGard for the management of oral mucositis and stomatitis.

In fact, AMAG’s share price movement shows that the company has underperformed the Zacks classified Medical - Biomedical and Genetics industry year to date. The stock is down 45.2% compared with industry’s fall of 2.2%.

We remind investors that Makena became part of the company’s portfolio following the acquisition of Lumara Health in Nov 2014. Since then Makena has been a significant sales driver for AMAG. Makena's estimated market share expanded to 42% in 2016 with two-third of Makena sales coming from the single-dose vials. In the upcoming quarters, AMAG anticipates an increase in sales of the product. Meanwhile, AMAG is developing an auto-injector device for subcutaneous administration of Makena (Makena SQ), including chemistry, manufacturing and controls development, in partnership with Antares Pharma, Inc. (NASDAQ:ATRS) as well. It is under review in the U.S. and has set a a Prescription Drug User Fee Act (PDUFA) target action date of Feb 14, 2018. If approved, Makena SQ auto-injector will ensure easier administration by healthcare providers and less painful injections for patients.

Meanwhile, Feraheme continues to grow in both the hospital and hematology/oncology segments. In 2016, the company signed a large hospital group purchasing organizations (GPO) agreement which should broaden the company’s access in large hospital segment and potentially increase its market share. Going forward, AMAG expects service revenues from the Cord Blood Registry (CBR) services (AMAG acquired CBR in Aug 2015) to contribute significantly to the company’s top line due to continued efforts to increase new enrollments of cord blood and cord tissue units in storage facility, and recurring revenue from a growing base of stored units.

Notably, AMAG has been pursuing strategic acquisitions and deals to boost its portfolio and pipeline. Evidently, the company added two products to its women’s health portfolio in 2017-Rekynda and Intrarosa. AMAG acquired exclusive U.S. rights to develop and commercialize Rekynda from Palatin Technologies, Inc. Rekynda is designed for the on-demand treatment of hypoactive sexual desire disorder (HSDD) in pre-menopausal women. The company also bought the U.S. commercial rights to Endoceutics, Inc.’s drug, Intrarosa (prasterone), in February. Intrarosa was approved by the FDA to treat women experiencing moderate to severe pain during sexual intercourse (dyspareunia) and is expected to be launched in the U.S. by this year.

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As the company invests in the potential launch of Intrarosa and Makena subcutaneous auto-injector as well as label expansion for Feraheme, the costs of the company will rise which will hurt profits to an extent. Patent challenges for Feraheme might also remain an overhang.