Amag narrows 3Q loss, but shares fall on concerns
LEXINGTON -- Shares of Amag Pharmaceuticals Inc. fell sharply today, a day after the company said it will slash 24 percent of its work force due to declining sales and safety concerns surrounding its only marketed product, the anemia drug Feraheme.
While Amag reported a narrower loss for the third-quarter compared with a year ago, sales of Feraheme fell on a quarter-to-quarter basis because of a decline in provider demand in the dialysis market. Meanwhile, demand also fell in the non-dialysis market because of safety concerns over heart-related side effects. Amag is currently discussing changes to the drug's safety label with the Food and Drug Administration after the agency raised concerns.
In its third-quarter earnings announcement on Thursday, Amag also said it is cutting its staff while discontinuing development of Feraheme as a potential imaging agent.
In afternoon trading today, shares tumbled 17.3 percent, or $3.34, to $15.96, after hitting a 52-week low of $15.13 earlier.
The company said its third-quarter loss narrowed to $17 million from, or 81 cents per share, from $22.1 million, or $1.29 per share, during the same period a year earlier. Revenue surged year-over-year to $16.9 million from $3 million on sales of the anemia drug Feraheme, which was launched in July of 2009.
Analysts polled by Thomson Reuters expected a loss of $1.10 per share on $20.2 million in revenue.
The company said it also met with the FDA to discuss the registrational path for Feraheme as an imaging agent and decided to end the program after reviewing the market potential and development costs for the product.
Jefferies & Co. analyst Eun K. Yang downgraded shares of Amag to "Underperform" from "Hold" on Friday, citing the sales decline for Feraheme, recent safety concerns.