AMAG Pharmaceuticals (AMAG) Can't Get Off Its Back Due to Ferahem Safety Concerns

After yesterday's 16% drop, AMAG Pharmaceuticals, Inc. (Nasdaq: AMAG) is down another 10% today on continuing safety concerns about its Ferahem drug. While the company has not publicly addressed the issue they are talking with analysts.

Yesterday's major downside was exacerbated by a downgrade from Summer Street. The firm downgraded shares from Buy to Neutral, highlighting the Ferahem safety concerns. Analyst Carol Werther said in her report, "We are aware of several patients hospitalized with anaphylactiod reactions to Feraheme. We are aware of one death that may or may not be directly related to Feraheme. Since we do not know how many patients have been treated since the July launch, it is impossible to know if it is within the labels' "In clinical studies serious hypersensitivity reactions were reported in 0.2% (3/1,726) of subjects receiving Feraheme." While the incidence could be in line with the 0.2% in Feraheme’s label there is no way to know."

A number of analysts have now come out to defend the company on these concerns.

Here is what a few of them are saying (from yesterday afternoon):

Robert W. Baird: "Earlier this week, we highlighted commentary from AMAG management indicating Feraheme commercial safety data is tracking in line to slightly better than the drug’s label, a notion reiterated on a client call we held today with management. Despite this, AMAG shares remain weak (down ~15%) on still unsubstantiated safety concerns. Consequently, we are aggressive AMAG buyers here... speculation around Feraheme safety issues is unfounded: First, adverse events have been consistent (if not slightly better) than approved label, with no confirmed treatment-related deaths...Second, pharmacovigilance program is robust – if there were an issue, AMAG would know...Third, notion of regional patterns is false... Fourth, all Feraheme safety events have been submitted to FDA through December 2009." Reiterate Outperform rating, $53 price target.

Needham & Company: ""Among the ~800 drugs in regular use today in the US, all of these drugs have benefit and have risks (WWK, from patient care and the FDA). With respect to benefit, Feraheme continues to show a clinically relevant effect in raising hematocrit and correcting iron deficiency anemia (IDA) in adult patients with chronic kidney disease (WWK, from clinical trials and consultants with experts in the real world). In terms of side effects, the Company conducts an ongoing pharmacovigilance program and reports this information to the FDA on a quarterly basis as well as an urgent basis if serious side effects are noted. To date, according to the Company, the rate of serious side effects is consistent with the information on the drug label, or ~ 0.2% (3/1726). We estimate that ~15,000 – 20,000 patients have been treated with Feraheme to date, thus we would expect 30-40 serious hypersensitivity reactions to Feraheme. Noting that the death rate for dialysis patients is ~2% per month (WWK, from the medical literature), there have been no deaths attributable to Feraheme to date. The FDA has been known to require a company to issue a Dear Doctor letter a serious side effect is seen: none has been issued to date on Feraheme (WWK, from FDA website)." Maintains Buy rating.

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