AMAG Hopeful for Approval

FDA Approval of Ferumoxytol Expected Mid-2009

AMAG Pharmaceuticals Inc.’s (AMAG - Analyst Report) lead drug candidate Ferumoxytol (Feraheme) is under the FDA review. The company received two approvable letters in October and December 2008 respectively.

However, good news is that the letters did not ask for additional clinical trials. Instead, the agency only requested data related to chemistry, manufacturing and controls (CMC) questions and labeling issues.

Specifically, in the second approvable letter, the agency indicated that the following additional information is required prior to granting approval of ferumoxytol: Data to clarify a specific chemistry, manufacturing and controls (CMC) question; resolution of the deficiencies observed during the pre-approval inspection of the Company's manufacturing facility; and finalization of labeling discussions with the FDA.

The company has provided a response to the FDA regarding the CMC question, and is in active dialogue to resolve the outstanding manufacturing issues. We believe the company will have new information to share soon. We believe the FDA will agree with the label of Ferumoxytol for the treatment of patients of iron deficiency anemia in chronic kidney disorders (CKD) on dialysis or not on dialysis.

From currently available clinical evidence, we believe Ferumoxytol is a viable drug candidate. The drug candidate has advantages over oral iron product in terms of both efficacy and safety profile.

We remind investors that the FDA rejected Daiichi Sankyo’s Injectafer in February 2008 on grounds of higher heart problems and cardiac-related deaths when compared to an oral iron drug. This eliminates an important potential competitor for Ferumoxytol. We are optimistic that the FDA will approve Ferumoxytol in middle 2009.

AMAG is also planning to initiate a few phase III trials to expand labels of Ferumoxytol in additional indications. We are optimistic of the drug receiving approval for one or more of these indications by 2011, thereby driving growth in the post-2011 period. With the expanded label, we expect Ferumoxytol could become a blockbuster for AMAG.

Financial Position is Strong

Currently, AMAG generate very limited revenue from two existing drugs. Net revenue for the 4Q08 was $0.6 million. Net loss was $21.8 million or $1.28 per share.

As of December 31, 2008, the Company’s cash, cash equivalents, investments and settlement rights associated with certain auction rate securities totaled $215.0 million. With over $200 million in cash, we are not overly concerned with the cash burn at this point of time.  The company did not have any long-term debts or any off-balance sheet arrangements as of December 31, 2008.

We maintain our Buy rating on AMAG with a target price of $55.