The new CEO at troubled AMAG begins his battle against an array of threats by axing staff and slashing costs
Scott Myers stepped into his new job as CEO of troubled AMAG 2 weeks ago, and he has his work cut out for him.
In their Q1 call with analysts on Monday, Myers outlined a plan to slash costs, laying off 140 staffers — 30% of the total — as Covid-19 bites into its sales operations and derails clinical trials. The goal is to cut costs by $100 million. And he still has to find out whether the FDA will force the company to pull Makena off the market after a majority of the members on an FDA advisory committee pushed for that in the wake of their failed confirmatory study.
In his opening statement, Myers sized up the challenge ahead:
Many people have asked me why would you join AMAG now, with the broader impacts of COVID and given AMAG’s previously announced changes? The last several companies that I’ve 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.
For now, the FDA is rebuffing AMAG’s request for a meeting on Makena, telling the company it is “premature” to schedule a call as they’re still reviewing the situation.
Nine years ago the FDA offered an OK for the drug, supposed to prevent preterm births and replace a compounded drug, requiring a confirmatory study that took years to assemble and execute. That study showed no difference between the drug and a placebo, triggering the negative panel vote and threatening AMAG’s key product.
In the meantime, AMAG is looking to offload two drugs to raise cash: Intrarosa (prasterone) and Vyleesi (bremelanotide injection). And their work to come up with new products has been severely hampered by the pandemic.
From their Q1 report:
The AMAG-423 Phase 2b/3a clinical trial is a hospital-based trial and all sites have paused new patient enrollment. The company has had to pause initiation of new sites due to the pandemic, significantly impacting recruitment and enrollment. AMAG continues to work with the FDA to initiate the ciraparantag Phase 2b trial in healthy volunteers in the U.S. However, the COVID-19 pandemic has forced the clinical trial sites where the company expected to conduct the trial to close.