AMAG Pharmaceuticals Inc.
) recently announced certain changes to its operating cost
structure. The company intends to focus on Feraheme and boost its
product portfolio with commercial stage assets.
AMAG's global phase III iron deficiency anemia (IDA) clinical
program for Feraheme is scheduled to complete this year. This
should allow the company to file a supplemental New Drug
Application (sNDA) for Feraheme.
AMAG is managing its internal development expenses so as to meet
its future development requirements.
We note that Feraheme is approved in the US since June 2009. It
is also approved in Canada and is marketed by
). Recently, Feraheme received marketing authorization in the EU
where it will be launched in 2012 under the trade name of
AMAG intends to outsource its manufacturing requirements and is
divesting its own Cambridge, MA manufacturing facility. With the
company deciding to divest its manufacturing facility, AMAG will
now stop producing GastroMark. AMAG will be incurring one-time
costs related to the GastroMark agreements of around $1.6 million
in the second quarter.
The company also intends to cut its workforce by 45 positions by
the end of this year and expects to incur restructuring costs of
about $1 million. Of the $1 million, AMAG expects to recognize $0.5
million in the second quarter 2012.
AMAG stated that these restructuring efforts will help reduce
operating expenses from early 2013. AMAG added that external
research and development expenses related to the company's IDA
clinical development program will not be recurring, resulting in
further reduction in the company's 2013 operating expenses. The
change in the manufacturing structure will also result in lower
cost of goods sold in 2014.
We currently have a Neutral recommendation on the stock, which
carries a Zacks #3 Rank (short-term Hold rating).
AMAG PHARMA INC (AMAG): Free Stock Analysis
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