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AMAG Up Nearly 10% in a Year on Label Expansion, Acquisitions

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Share price of AMAG Pharmaceuticals, Inc. has increased 9.7% year to date, against the industry’s decline of 30.3%.

AMAG has three marketed products — Feraheme (ferumoxytol), approved for intravenous (IV) iron replacement therapy for the treatment of iron-deficiency anemia (IDA) in adults 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 having a history of singleton spontaneous preterm birth; and MuGard for the management of oral mucositis and stomatitis.

In February 2018, the company received FDA approval for the label expansion of Feraheme and Makena. The FDA approved the label expansion of Feraheme (ferumoxytol injection) beyond the current CKD indication. The new approval includes all eligible adult IDA patients who have intolerance to or have had unsatisfactory response to oral iron. The company launched Feraheme with a broad IV IDA label during the first quarter of 2018 and it is already capturing additional market share.

In February 2018, the FDA also approved a new administration option for Makena, a subcutaneous auto-injector drug-device combination product, to reduce the risk of preterm birth in certain at-risk women. The company has developed an auto-injector device for subcutaneous administration of Makena (Makena SQ), including chemistry, manufacturing and controls development, in partnership with Antares Pharma. Revenues for the Makena subcutaneous auto-injector grew three fold in the third quarter of 2018 versus that in the second quarter, and made up 57% of the total Makena brand revenues. The company is optimistic about the Makena subcutaneous auto-injector.

The label expansion of the drugs will enable the company to boost sales and increase its market share.

Moreover, AMAG has been pursuing acquisitions and deals to boost its portfolio. In September 2018, the company exercised its option to acquire the global rights to an orphan drug candidate, AMAG-423. It is pursuant to an option agreement entered in July 2015 with Velo Bio, LLC, a privately-held life-sciences company. The terms of the deal were amended at the time of its execution. AMAG-423 is a polyclonal antibody, which is currently in clinical development for the treatment of severe preeclampsia in pregnant women. The candidate has been granted Orphan Drug and Fast-Track review designations by the FDA. AMAG will now complete the phase IIb/IIIa study that Velo initiated in the second quarter of 2017. The company expects to report top-line data from the study in the first half of 2020 and plans to submit a new drug application (NDA) to the FDA during the second half of 2020.

Further, in 2018, AMAG bought exclusive U.S. rights to develop and commercialize Palatin Technologies’ Vyleesi (bremelanotide). Vyleesi is designed for the on-demand treatment of HSDD in pre-menopausal women. Vyleesi is currently under review with the FDA and the company is preparing for the upcoming FDA advisory committee meeting in January 2019 and a PDUFA date of Mar 23, 2019 has been set. An approval of this candidate will be a big boost for the company as it caters to a huge unmet medical need for women.

Further, this month, AMAGentered into an agreement to acquire Connecticut-based privately held Perosphere Pharmaceuticals Inc., which will add the latter’s investigational candidate, ciraparantag, to its portfolio. This move will strengthen the company’s expertise in hematology pipeline.

The company completed the divestiture of CBR in August 2018 and this sale will allow it to strengthen its balance sheet significantly by paying off its $475-million high yield notes. 

However, stiff competition and generic threats are a concern for the company.

 

Zacks Rank & Stocks to Consider

AMAG currently carries a Zacks Rank#3 (Hold).

Some better-ranked stocks worth considering are Galapagos NV (GLPG - Free Report) , Inovio Pharmaceuticals, Inc. (INO - Free Report) and Myriad Genetics, Inc. (MYGN - Free Report) . All of them sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Galapagos’ loss per share estimates have narrowed from $1.89 to $1.71 for 2018 in the past 60 days.The company delivered a positive earnings surprise in three of the trailing four quarters, with average of 64.06%.

Inovio’sloss per share estimates have narrowed from $1.06 to $1.00 for 2018 and from $1.09 to $1.06 for 2019 in the past 60 days.The company delivered a positive earnings surprise in three of the trailing four quarters, with average of 21.11%.

Myriad’s earnings per share estimates have increased from $1.66 to $1.75 for 2018 and from $1.88 to $1.89 for 2019 over the past 60 days. The company delivered a positive earnings surprise in all the trailing four quarters, with average of 25.62%.

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