Credibility shredded, AMAG jettisons CEO and 2 drugs as it looks to reorganize around a salvage plan
Out go two drugs for women’s health: the controversial Vyleesi approved last year to stimulate women’s sexual desire and Intrarosa for the relief of pain during sex. The biotech $AMAG plans to auction off those drugs to anyone game to try to market them. Also out: CEO William Heiden, once they find a successor for the helm.
Heiden is following in the retreating footsteps of 110 sales staffers who were cut last year during an earlier reorganization.
The CEO had this to say in a prepared statement:
We continue to believe in the significant long-term potential of Intrarosa and Vyleesi. However, the uncertainty around the long-term durability of Makena revenues makes it challenging to invest in both our promising pipeline and in the physician and consumer marketing required to support these two new products.
AMAG has been under considerable scrutiny since a majority of FDA advisers voted to suggest that the agency should yank their approval for Makena. The drug flopped badly in the confirmatory study the FDA had demanded as it provided an accelerated OK on the drug — way back in 2011.
Now persuading the FDA to keep the preterm birth drug Makena on the market is a top priority, along with the development of ciraparantag and AMAG-423 while “driving the continued growth of Feraheme, which funds our two pipeline assets.”
Analysts remained skeptical after the announcement Thursday.
Eun Yang at Jefferies says selling off the two under-performing assets made sense, but didn’t see any quick upside in terms of revenue. The biotech has lost credibility in recent years.
Note that in early-2017, when AMAG acquired Vyleesi ($60M upfront) & Intrarosa ($50M in cash + $13.5M in stock upfront), the Street was generally skeptical of the commercial potential and the shares sold off >30% during that period. From 2016-2019, total revenues declined by ~40% to ~$325M (our estimate) & non-GAAP OpEx increased by 37% to ~$387M (by our estimate).
The new CEO is going to have quite a challenge winning analysts back.