Amag Pharmaceuticals, the Lexington, MA-based developer of a drug for iron deficiency, said today it has received clearance from the FDA to start selling the drug on the U.S. market.
The intravenous drug, feromoxytol, will be marketed under the brand name Feraheme for adult patients with iron deficiency anemia with chronic kidney disease. The company (NASDAQ: AMAG) says it should be available for commercial use during the second half of July.
The FDA approval was based on four pivotal clinical trials that met their goals, demonstrating that the drug could boost the amount of hemoglobin, a protein that carries oxygen in the blood, for anemic patients better than doses of iron given orally. About $500 million worth of intravenous iron replacement agents are sold today to about 400,000 patients with chronic kidney disease on dialysis treatment, said Christopher Raymond, an analyst with Robert W. Baird, in a note to clients today. The company has no other marketed products, and no other meaningful drugs in development, so “Amag’s future hinges squarely on Feraheme,” Raymond said.
“Feraheme is easier and more convenient than the currently approved intravenous iron agents,” Raymond said in the note, in which he put a $70 price target on the stock. “While our investment thesis is based solely on Amag’s fundamental strengths, we think one must not ignore the possibility that this company may at some point be an acquisition target.”
Amag may face risks of healthcare reform altering the Medicare reimbursement landscape for dialysis treatment, which Raymond called “a valid risk factor.” Feraheme will also face competition from two established players in the iron deficiency market, Venofer and Ferrlecit, which have been on the market for many years, he said.
Amag shares climbed 4 percent to $56.90 in after-hours trading following the announcement.