Safety risks cloud kidney drug’s future

AMAG Pharmaceuticals’ shares fell 21 percent to their lowest in nearly five years after it found “life-threatening” events associated with its key drug, Feraheme, throwing into doubt the drug’s future sales.

On Thursday, the company said fatal events, including hypersensitivity and cardiac events, have been reported after taking the kidney drug.

AMAG shares, which had fallen more than 30 percent since the drug featured in the FDA’s list of possible drug safety concerns in August, hit a low of $15.13 Friday.

Analysts said labeling concerns at such an early stage of commercialization could cost the company a lot.

Feraheme was approved by the U.S. Food and Drug Administration last year to treat iron-deficiency anemia in adults with chronic kidney disease.

Jefferies & Co analyst Eun Yang said there was a 50 percent chance for a “black box warning” on the drug that could further hurt sales, which shrunk 6 percent from the second quarter to $15.1 million in the third quarter.

A black box warning on the packaging of a prescription drug highlights safety risks and an extension of the observation period after administration of the drug.

“We believe if Feraheme’s label includes a black box, future revenues will likely be a fraction of our current estimates and AMAG will struggle to become a profitable and perhaps even viable company,” Ladenburg Thalmann analyst Juan Sanchez said.

He said even if the safety profile of Feraheme did not deserve a black box warning, it was difficult to predict a final outcome, given the increased scrutiny of U.S. health regulators.

According to Thomson Reuters data, Feraheme was expected to hit sales of $187 million by 2014.

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By Krishnakali Sengupta

BANGALORE (Reuters)