The restructuring is related to the planned divestiture of Intrarosa (prasterone) and Vyleesi (bremelanotide injection) and the impact of the COVID-19 pandemic.
During its first-quarter financial reporting, Waltham, Massachusetts-based AMAG Pharmaceuticals announced company-wide restructuring and plans to cut the workforce by about 30%, or about 140 jobs.
The company reported total revenues for the quarter of $68.7 million, including $44.4 million from the sales of Feraheme and $21.8 million from Makena (hydroxyprogesterone caproate injection). The company had an operating loss of $19.6 million and an adjust EBITDA loss of $5.5 million.
The restructuring is related to the planned divestiture of Intrarosa (prasterone) and Vyleesi (bremelanotide injection) and the impact of the COVID-19 pandemic.
“We are sharpening our focus on our priorities of maximizing Feraheme’s value, retaining patient access to Makena and continuing to efficiently develop innovative therapies, namely ciraparantag,” said Scott Myers, president and chief executive officer of AMAG. “As we look to the future, it is difficult to estimate the severity and duration of the COVID-19 pandemic. We’ve seen signs of stabilization and remain confident in the underlying demand for our products; however, we cannot speculate on the subsequent speed of recovery and the overall impact on our business.”
Myers took over the company about two weeks ago, from where he ran Seattle’s Rainier Therapeutics. He replaced William Heiden, who stepped down.
“Many people have asked me: ‘Why would you join AMAG now, given the broader impact of COVID and given AMAG’s previously announced changes?” Myers said, Xconomy reported. “The last several companies that I helped lead also had a myriad of challenges spanning their entire enterprise, and we found solutions. I believe that will be the case here as well.”
The company indicated that its enrollment for the AMAG-423 Phase IIb/IIIa clinical trial had been paused due to the pandemic, as the trial is hospital-based. It had also paused initiation of new study sites. It is also working with the FDA to initiate the ciraparantag Phase IIb trial in healthy volunteers.
One of the drugs AMAG is holding onto is Makenda, a weekly injection of hydroxyprogesterone caproate designed to decrease the risk of preterm birth for pregnant women with a history of spontaneous preterm birth. In October 2019, an FDA advisory committee voted 9-7 recommending the agency withdraw approval based on data suggesting the drug is not effective. When the FDA plans to make a decision on the drug is unclear. Myers indicated that the agency said scheduling a meeting on the subject would be “premature.”
The other drug, Feraheme, is an infusion for iron deficiency anemia in adults with chronic kidney disease.
Total costs and expenses decreased in the quarter by $105.3 million to $88.2 million compared to the first quarter of 2019. As of March 31, 2020, the company reported $124.7 million in cash and investments, with $320 million in long-term debt.
“Based upon the extraordinary dynamics across the industry due to the COVID-19 pandemic, we have decided to withdraw our 2020 financial guidance,” said Ted Myles, AMAG’s chief financial officer and chief operating officer. “We remain committed to our previously stated goal of reducing total operating expenses by more than $100 million in 2020, as compared to 2019, and we are on track to achieve this objective. Furthermore, we continue to strive towards returning to profitability this year. The work force reduction that we announced today is an important step towards achieving these corporate objectives. While it was a difficult decision, we believe the organization is now the right size to support our long-term goals. We’d like to thank our colleagues who are leaving AMAG for their many contributions to our organizations.”
