Why AMAG Pharmaceuticals, Inc. Shares Slumped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of AMAG Pharmaceuticals , a biopharmaceutical company focused on developing therapies to treat iron deficiency anemia, or IDA, fell as much as 15% in very early trading after announcing the receipt of a complete response letter from the Food and Drug Administration for its supplemental new drug application for Feraheme.
So what: AMAG's goal had been to expand the proposed indications of Feraheme from chronic kidney disease to all adult iron deficiency anemia patients, but the FDA's CRL put a stop to that. According to the press release, the FDA noted that there is not currently enough trial information to determine the safety and efficacy of the proposed new indication of treating all adult IDA. The FDA suggested AMAG run additional trials if it wishes to gain this additional indication with a focus on testing for hypersensitivity/anaphylaxis and cardiovascular events to determine safety, and evaluating different dosing options and/or administration options, as well. AMAG plans to have further discussions with the FDA to determine its next step forward with Feraheme.
Now what: This is certainly not good news for AMAG, but it's also not a death blow, either, since it already has Feraheme on the market for the CKD indication, and that alone could affect as many as 20 million adults in the U.S. Clearly, an all-IDA indication would be more favorable, because you're talking about a much broader treatment audience, but the solution of running additional trials to resolve the FDA's curiosity seems well attainable. It could be a while before AMAG lives up to its current $446 million valuation (as of this writing), but tight cost controls, and steadily growing Feraheme sales, make this a watchlist-worthy company.
Will this top stock run circles around AMAG Pharmaceuticals in 2014?
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
The article Why AMAG Pharmaceuticals, Inc. Shares Slumped originally appeared on Fool.com.Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong , track every pick he makes under the screen name TrackUltraLong , and check him out on Twitter, where he goes by the handle @TMFUltraLong . Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.