Amag Pharmaceuticals is trying to climb out of a midlife crisis, and it’s using acquisitions to do so.
The Waltham, MA-based company split from long-time CEO Brian Pereira in 2011, a few weeks after its ill-fated attempt to merge with Allos Therapeutics (NASDAQ: ALTH) was voted down by shareholders. Amag (NASDAQ: AMAG) tried to move on from the troubled times by focusing on its firstborn therapeutic product, called ferumoxytol (Feraheme), which treats iron deficiency. The company hired a new CEO, William Heiden, to do so.
Safety concerns prevented the drug, which was approved in 2009 and is still on the market, from becoming the savior Amag was hoping for. The Food and Drug Administration denied a request to get a broader indication for ferumoxytol (Feraheme) in January of last year. In March the FDA ordered that a so-called “black box warning”—the most stringent type—be added to the drug’s label to recommend patients who have an allergic reaction to any intravenous iron-replacement product not use it. (The drug’s label already carried warnings about the risks of potentially fatal allergic reactions.)
And yet Heiden and Amag aren’t giving up. The company announced its second acquisition in a year this week; it is buying San Bruno,CA-based Cord Blood Registry for $700 million. The company owns a facility that stores 600,000 umbilical cord blood and tissue stem cell samples for pregnant women and their families—more than half of all privately stored cord blood samples in the U.S. The registry also works with academic institutions that evaluate the use of stem cells in clinical trials for regenerative medicine in conditions such as autism, cerebral palsy, and pediatric stroke.
The new business fits within Amag’s maternal health business (which it gained through an acquisition last year), Heiden said in a statement. Cord Blood Registry, which was sold by private equity firm GTCR, brings a “differentiated” product in a specialty market to the company, which is part of Amag’s strategy, Heiden said in a statement.
In November Amag completed the acquisition of Lumara Health, a specialty pharmaceutical company with a product that reduces the risk of premature labor in women who have previously had preterm babies. Amag paid $600 million in cash and 3.2 million of stock upfront, with $350 million in potential milestones for Lumara and its FDA-approved product, hydroxyprogesterone caproate (Makena).