AMAG stock falls on investor concerns

Shares of biopharmaceutical company AMAG Pharmaceuticals Inc. fell today on investor concern over the company's iron deficiency treatment and auction rate securities.

Additionally, the Cambridge-based company on Thursday reported worse results than Wall Street expected. Nevertheless, analysts remained positive on the stock.

The stock fell $2.47, or 5.1 percent, to $46.14 in midday trading. Shares hit a new 52-week low of $45.55 earlier in the trading session.

A key concern centers on the company's drug candidate ferumoxytol. The drug is meant as an intravenous iron replacement therapy for iron deficiency anemia in chronic kidney disease patients.

Earlier this month, the Food and Drug Administration rejected a rival drug candidate, Injectafer, made by Daiichi Sankyo Co. The rejection sparked some concern fermuxytol could face increased scrutiny. The FDA is expected to render a decision on ferumoxytol by Oct. 19.

Furthermore, in a conference call Thursday, AMAG said it has experienced auction rate securities failures. The securities are a type of bond where the interest rate is frequently reset.

"We remain comfortable with the credit worthiness of our auction rate securities and believe that it is probable that we will be able to liquidate these holdings without any material losses in the future," Chief Financial Officer David Arkowitz said.

Analysts brushed off the concerns over ferumoxytol and the securities, and reaffirmed positive ratings.

"We are not concerned about these issues and see AMAG as exceptionally well-positioned, wrote Jefferies & Co. analyst Adam Walsh in a note to investors. He reiterated a "Buy" rating with a $99 price target.

Deutsche Bank-North America analyst Jennifer Chao also reaffirmed a "Buy" rating, with a $100 price target.

Meanwhile, Robert W. Baird analyst Christopher Raymond maintained a "Buy" rating with a $87 price target, citing the company's cash position. He also said a new Medicare reimbursement system is not expected to interfere with the launch of ferumoxytol.

Late Thursday, AMAG reported a fourth-quarter loss of $9.7 million, or 57 cents per share, compared with a loss of $7.4 million, or 60 cents per share, during the same period a year prior. Revenue fell to $391,000 from $619,000.

Analysts polled by Thomson Financial expected a loss of 49 cents per share on revenue of $580,000.

Expenses rose 57 percent to $13.9 million from $8.9 million, as the company prepares to ask the FDA to approve ferumoxytol.

For the full year, the company lost $33.9 million, or $2.15 per share, compared with a loss of $28.6 million, or $2.47 per share, in 2006. Revenue edged lower to $2.6 million. (AP)