AMAG Kidney Drug Launched

Yesterday, Massachusetts-based biopharmaceutical company AMAG Pharmaceuticals Inc. (AMAG - Snapshot Report) launched the Feraheme (ferumoxytol) Injection in the U.S. It is an intravenous iron replacement therapy to fight anemia in patients with chronic kidney disease. The drug can be used by patients irrespective of them undergoing dialysis.

Wholesalers and specialty distributors will primarily distribute Feraheme in the U.S. More specifically, AMAG will use approximately 150 seasoned professionals which includes a 80-person specialized sales force to sell and market the drug. For every 510 mg vial, the wholesale acquisition cost (WAC) of Feraheme is $396.78.

Iron deficiency anemia is a significant problem in patients with chronic kidney disease and often goes underdiagnosed and undertreated. We feel peak sales of Feraheme could reach $500 million.

As a reminder, Feraheme is AMAG’s lead anti-anemia drug candidate. The company filed a New Drug Application (NDA) with the U.S. Food and Drug Administration (FDA) for the marketing approval of Feraheme on December 19, 2007. The NDA filing was accepted by the FDA in February 2008; eventually the FDA established December 30, 2008 as its target action date under the Prescription Drug User Fee Act (PDUFA) to complete its review.

However, on Dec 22, 2008, AMAG received a second Complete Response letter from the FDA, requiring additional information. The company responded to the issues raised letter which was accepted on May 12, 2009. Finally, the agency approved the kidney drug on June 30.

Even though we are pleased to hear about Feraheme’s approval and subsequent U.S. launch, we are aware of the stiff competition awaiting AMAG’s drug in the IV iron replacement therapy market. Venofer from Fresenius Medical Care AG & Co. (FMS - Snapshot Report) and Ferrlecit from Watson Pharmaceuticals, Inc. (WPI - Analyst Report)/ Sanofi-Aventis (SNY - Analyst Report) are AMAG’s main competitors in this market.

We have a Buy rating on the shares of AMAG based on Feraheme’s safety and efficacy profile, and potential for label expansion.

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