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AMAG Pharmaceuticals, Inc.’s (AMAG - Snapshot Report) European partner Takeda Pharmaceutical Company Limited (TKPYY) recently launched Rienso (ferumoxytol) in the EU. Rienso is an intravenous (IV) iron therapy to treat iron deficiency anemia (IDA) in adult patients with chronic kidney disease (CKD).

We note that Rienso gained marketing authorization from the European Commission in June this year. AMAG received marketing authorization based on extensive clinical development program data.

Takeda will be making a milestone payment of $15 million to AMAG for first sales of Rienso in Europe. The company will also receive tiered, double-digit royalties on sales of Rienso in the licensed territories.

We note that Rienso is already approved in the US for the same indication under the trade name of Feraheme. Rienso is also approved and launched in Canada where it is marketed by Takeda.

AMAG recorded third quarter 2012 sales of $16.2 million for Feraheme. The company expects 2012 Feraheme revenue in the range of $58–$60 million.

Moreover, the company is working on expanding Feraheme’s label. The company is conducting two studies in patients with IDA regardless of the underlying cause. AMAG reported positive results from the second phase III study during the third quarter of 2012. AMAG intends to submit a supplemental new drug application (sNDA) to the US Food and Drug Administration (FDA) for this indication by year end.

Our Recommendation

We currently have an Outperform recommendation on the stock, which carries a Zacks #2 Rank (short-term Buy rating).

We are pleased with the EU approval of the drug and believe that successful label expansion of the drug will drive revenue further. We expect investor focus to remain on Rienso’s performance in the EU as well as in the US.

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