AMAG poised to shoot from the blocks following Feraheme approval

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The decision might have come at the third attempt and one day late, but AMAG Pharmaceuticals will certainly not be complaining. The FDA yesterday not only handed the company the gift of approval for its iron replacement therapy, Feraheme, it also granted a much wished for broad label.

Although a positive outcome was widely expected this time round, the content of the label was less certain. The indication, to treat iron deficiency anaemia in chronic kidney disease, means the company can start trying to crack open the pre-dialysis market where intravenous therapies are not normally used, mainly because of the inconvenience. With Feraheme looking well set for launch, investor excitement is justified; shares in the company, which have been climbing in anticipation of approval, edged 2% higher this morning to $55.75, a 17-month high (Event - AMAG's Feraheme looking good for approval, June 15, 2009).

On a conference call this morning the company set out its plans to launch in the second half of July, marketed by the company’s 150 strong sales force, 80 of whom specialise in the area. Tim Healy, senior vice president of commercial operations, said the majority of nephrologists are already aware of Feraheme, and that the product will be pitched as a completely new option for iron deficient anaemia.

Market edge

Although no firm details were disclosed, the product will be sold at a premium to existing therapies such as Galenica’s Venofer and Ferinject. Sales this year are expected to derive from patients already on dialysis, the setting where intravenous iron is already widely used, and which is likely to become a fierce battle ground.

Despite an expectation that incumbents will compete heavily on price to maintain share, analysts’ forecasts indicate that Feraheme is set to become the market leading intravenous iron replacement therapy, in sales terms, by 2014. Consensus for that year currently sits at $298m, although upgrades are now likely.

The product’s swift infusion time, around 17 seconds compared with 15 to 30 minutes for rival products, is what should give Feraheme the edge in the intravenous market place. Not only is each infusion quicker, the product only requires two sessions in one week, whilst other products require eight to ten over a month.

For patients not yet sick enough to be on dialysis but with iron deficiency, Feraheme will be competing with oral iron, and to a certain extent the red blood cell boosters Epogen and Procrit, made by Amgen and Johnson & Johnson. Recent safety scares around the EPO products could give Feraheme a useful foot in the door here. In competing with oral iron, considerable dissatisfaction with the products in terms of efficacy should help persuade nephrologists to give AMAG’s product a go.

Market deftness

With regulatory approval now out of the way, focus will shift onto AMAG’s deftness in the marketplace. However it will take several months to fully gauge their progress.

Attention will also turn to expanding the Feraheme horizon, geographically and on indication. Brian Pereira, chief executive, said that the company is still evaluating whether to pursue partnerships in Europe, or launch itself. Meanwhile discussions with the European regulator are underway to determine the pathway for approval to treat iron deficiency in indications other than kidney disease.

Mr Pereira also said that in-licensing opportunities are being assessed, with a view to AMAG becoming a "leading nephrology biopharmaceutical company". If Feraheme starts living up to the blockbuster expectations that some commentators harbour, a takeover bid looks a more likely outcome for the longer term.

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