Disruption caused by the pandemic has intensified a round of planned layoffs at AMAG Pharmaceuticals, new CEO Scott Myers said Monday morning on his first earnings call with the company.
The Waltham, MA-based firm said it would cut 140 positions, or about 30 percent of its workforce, as part of a restructuring plan announced in January with an eye to returning the company to profitability this year. That’s more jobs than the total by which the company initially planned to shrink.
“Many people have asked me: ‘Why would you join AMAG now, given the broader impact of COVID and given AMAG’s previously announced changes?’” he said. “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.”
Shares of the company fell nearly 11 percent Monday, closing at $8.23.
The foundation of AMAG’s restructuring plan is its divestment of two drugs—prasterone (Intrarosa) and bremelanotide injection (Vyleesi)—and an exit from the “consumer-driven” women’s health business.
AMAG’s challenges include the possible withdrawal from the market of one of the two commercialized drugs it will retain after its divestment plan concludes. The drug, called Makena, is a weekly injection of hydroxyprogesterone caproate intended to reduce the risk of preterm birth for pregnant women who have previously had a spontaneous preterm birth.
In October, an FDA advisory committee voted 9-7 to recommend the agency withdraw its approval based on evidence suggesting the drug is not effective. The FDA doesn’t have to follow the recommendations issued by its advisory committees, but often does.
In the first full quarter following the meeting, revenue from the preterm birth risk-reduction drug was $21.8 million in the first quarter of 2020 compared to $31.3 million in the same quarter in 2019, Chief Commercial Officer Tony Casciano said on the call. It remains unclear when the FDA will make a decision on the future of the drug: Myers said the agency recently informed AMAG, in response to its request to start talks, that a meeting on the topic would be “premature.”
The company’s other commercialized drug, ferumoxytol injection (Feraheme), a treatment given via infusion for iron deficiency anemia in adults who have chronic kidney disease and can’t take iron orally, brought in $44.4 million in the past quarter compared to $40 million in the first quarter of 2019.
Casciano said the company saw some signs in April that could indicate the impacts from COVID-19 may be lessening, but that it’s too soon to say whether recovery is under way.
While AMAG withdrew its previous financial guidance for 2020, citing the difficulty of predicting the length of recovery from the pandemic, CFO Ted Myles said the company still plans to reduce its operating expenses this year by $100 million compared to its 2019 spending.
In the meantime, the company, with about 300 employees remaining, is also in limbo concerning its pipeline. AMAG’s Phase 2b/3a trial of an investigational treatment of digoxin immune fab for the treatment of severe preeclampsia and its planned Phase 2b test of ciraparantag, an anticoagulant reversal agent, are on hold because sites have paused patient enrollment or closed due to COVID-19.
“My vision is to stabilize the company … focus on our current products, make us much more cash-efficient and watching expenses, then really turn toward the future and look for other assets to bring in and improve our balance sheet,” Myers said.