AMAG Awaits FDA Decision

AMAG Pharmaceuticals Awaits Final FDA Decision by Month-End

The US FDA will make a final decision on AMAG Pharmaceuticals Inc.'s (AMAG - Snapshot Report) anti-anemia drug Feraheme (ferumoxytol) on June 29, 2009.

After a series of delays, investors will finally know if the FDA will approve AMAG’s lead anti-anemia drug. Based on currently available data, we expect the straight approval of Feraheme this time by the US agency.

Feraheme is an iron oxide nanoparticle which is highly bioavailable. Feraheme can be easily incorporated into hemoglobin with minimal detectable and releasable free iron. The drug candidate is intended to treat iron deficient anemia in chronic kidney disease (CKD) patients.

The company filed a New Drug Application (NDA) with the FDA for the marketing approval of Feraheme on December 19, 2007. The NDA filing was accepted by the FDA in February 2008 and the company received a complete response letter from the FDA in late October 2008. In Nov 2008, AMAG responded to the complete response letter and the FDA designated the company's resubmission for its NDA as a complete, Class 1 response.

The FDA established a December 30, 2008 Prescription Drug User Fee Act (PDUFA) target action date. However, On Dec 22, 2008, AMAG received a second Complete Response letter from the FDA, requiring the following information: 1) data to clarify a specific chemistry, manufacturing and controls (CMC) question; 2) resolution of the deficiencies observed during the pre-approval inspection of the Company's manufacturing facility; and 3) finalization of labeling discussions with the FDA.

The company responded to the issues raised in the December 2008 complete response letter, and the FDA accepted the response on May 12, 2009 and established a PDUFA date of June 29, 2009.

We believe Feraheme has a high probability to get a nod from the FDA this time. Peak sales of Feraheme could reach $500 million.

AMAG also decided to pursue a broad phase III clinical development program to treat iron deficiency anemia (IDA) in a wide range of patient populations -- and in multiple disease states rather than pursuing individual indications. This will greatly broaden Feraheme’s utility for anemia.

AMAG plans to launch Feraheme promptly after approval. Sales force of approximately 80 renal sales specialists and managers has been hired and has been out in the field, interacting with physicians on disease state awareness, profiling of accounts and similar activities. The sales team is targeting over 5,000 nephrologists and hematologists in the US.

We reiterate our Buy rating for AMAG with a price target of $62.