AMAG's Iron Drug Put to the Fire

The ongoing bull-bear tug of war over AMAG Pharmaceuticals (AMAG Quote) centers on one key question: Has the company studied enough patients using its intravenous iron therapy over a long enough time period to satisfy the safety requirements of U.S. regulators?

Lately, the bears have been winning this battle, especially since Merrill Lynch biotech analyst Andrew Berens jumped onto their side of the rope.

Berens' answer to the question above is an emphatic "no," which he spelled out when he downgraded AMAG from neutral to sell on April 9. Berens' negativity toward AMAG, which actually began in February, has helped push the stock down roughly 40% this year.

AMAG shares closed Monday at $35.57.

AMAG's intravenous iron therapy, known as ferumoxytol, can be administered in two, 17-second injections, far faster than conventional intravenous irons to treat anemia.

Ferumoxytol is being developed initially for use in patients with chronic kidney disease, including those on and off dialysis. AMAG completed four phase III studies and filed for approval in the U.S. last year. The Food and Drug Administration is expected to issue its decision by Oct. 19.

At Issue

Berens, citing discussions with FDA officials, claims that AMAG has taken shortcuts with the clinical development of ferumoxytol -- too few patients, too little follow-up, not enough dosing in "real world" situations to meet regulatory guidelines. Berens claims that AMAG is seeking approval of ferumoxytol as a "chronic use" treatment, which means that patients will need to be dosed repeatedly over time. As such, the FDA's safety standards are higher.

"We believe it unlikely that AMAG will be able to convince the FDA that the current development program accurately characterizes the safety profile of the drug as it is likely to be used in the 'real world' where dialysis patients receive 'repeated, intermittent use' of iron indefinitely," writes Berens in his April 9 note.

Berens further claims that AMAG's current database under review by the FDA only includes studies in which kidney disease patients received small doses of ferumoxytol for short periods of time.

The end result, says Berens: The FDA probably won't approve ferumoxytol this October, as the bulls expect. In fact, it's likely that before the October approval date arrives, the FDA will send a letter to AMAG instructing the company to run another year-long safety trial. This will push back ferumoxytol's launch in the U.S. by three years to 2011, he believes.

Is Berens right? Absolutely not, argues AMAG CEO Brian Pereira.

The Counter

To hear Periera explain it, ferumoxytol is not a chronic therapy in the strict definition of the term because kidney disease patients, whether they are on dialysis or not, will only receive ferumoxytol if and when their iron stores are depleted.

"What our [ferumoxytol filing] proposes is to treat iron-deficient anemia," says Pereira. Importantly, ferumoxytol will not be used to prevent iron-deficient anemia, he adds, which means that patients won't be dosed with the drug unless they need it to replenish iron in their system.

A regimen where ferumoxytol is administered to kidney disease patients quickly, only when their iron stores are depleted, is more an episodic treatment that truly mimics the real world setting in which these patients are treated, says Pereira. He rejects Berens' claim that giving repeated doses of ferumoxytol, whether patients need or not, is something the FDA requires.

Yes, some patients will receive repeat doses of ferumoxytol, but Periera says the company has data filed with the FDA to satisfy the agency's safety and exposure requirements.