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AMAG Pharmaceuticals, Inc. (NASDAQ:AMAG)

IDA-301 Data Conference Call

July 18, 2012 08:00 am ET

Executives

Bill Heiden – President & Chief Executive Officer

Lee Allen, MD – Chief Medical Officer

Frank Thomas – Chief Operating Officer

Amy Sullivan – Vice President, Investor Relations and Corporate Communications

Analysts

Mike – JP Morgan

Sarah – Morgan Stanley

Eun Yang – Jefferies & Company

Carol Werther – Summer Street Research Partners

Matt McKinsey – Robert W. Baird & Co.

Operator

Good morning, my name is Justine and I will be your conference operator today. At this time I would like to welcome everyone to the AMAG Pharmaceuticals’ Conference Call. (Operator instructions.) Thank you. Vice President of Investor Relations Amy Sullivan, you may begin your conference.

Amy Sullivan

Thank you, Justine. Good morning, and welcome to the AMAG Pharmaceuticals’ Conference Call to discuss preliminary data from the second of two Phase III studies evaluating Feraheme for the treatment of iron deficiency anemia in a broad range of patients.

We issued a press release earlier this morning that contains the top line data from the study. We have focused the data relating to the key points to allow us to preserve our options to present the full dataset at appropriate medical conferences and journals in the future. If you haven’t received a copy of the release you can get it from the investors section of our website at www.amagpharma.com.

Before proceeding with this call, please be reminded that any statements we make during the course of this conference call that are other than historical facts are forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. We want to emphasize that these forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Please refer to our recent filings with the SEC for a full review of the risks and uncertainties associated with our business.

The agenda for our call today will be brief. Bill Heiden, our CEO will provide a review of the Phase III registration program for Feraheme. Lee Allen, our Chief Medical Officer will review the preliminary data from the study reported today, and Bill will close the prepared remarks and we’ll open the call for Q&A. Frank Thomas, our Chief Operating Officer, is also with us today. With that I’ll now turn the call over to Bill.

Bill Heiden

Thank you, Amy, and thanks to all of you for joining us here this morning. Before we jump into the data I thought it would be helpful to outline the scope of our Feraheme Phase III program and some of the history behind the design of the clinical program.

The final design of this registration program emerged after detailed discussions regarding endpoints, comparators, and sizing of the trials among other things with both US and EU regulatory authorities. The program consists of two Phase III trials, trials that we call IDA-301 and IDA-302, and an extension study called IDA-303 which evaluates repeat dosing. We initiated the program in 2010 and completed enrollment earlier this year. The data from IDA-301 and IDA-302 will be the basis of our SNDA submission to the FDA for a broad IDA indication which we plan to submit by the end of the year.

Takeda is responsible for filing the broad indication in their territories and we expect that they will be filling in the EU sometime in 2013. So with that brief background I’m now going to turn it over to Lee who’s going to review the data. Lee?

Lee Allen, MD

Thank you, Bill, and thank you to those of you who have joined us this morning on the call. As Bill mentioned, today we reported preliminary top-line results from the IDA-301 study, the second of two Phase III studies that make up our global registrational program for Feraheme for the treatment of iron deficiency anemia regardless of the underlying cause. In this program, we have now treated more than 1000 broad iron deficiency anemia patients who had a history of unsatisfactory response to oral iron with Feraheme. As we’ll discuss today we are very pleased with the results that have been achieved.

The 301 study compared treatment with Feraheme to treatment with placebo. The study was robust, enrolling 808 at 136 sites in the United States, Canada, India, Latvia, Hungary, and Poland. The patients enrolled in this study, as I mentioned, had a history of unsatisfactory response to oral iron or could not otherwise tolerate oral iron, and therefore they never achieved the desired clinical benefit from oral iron treatment. As in IDA-302, the patients enrolled in this study had iron deficiency anemia associated with various conditions including abnormal uterine bleeding, cancer, gastrointestinal disorders or other causes.

Patients in this study were randomized 3:1 to receive a 1.0 gram intravenous course of Feraheme or placebo with 608 patients randomized through the Feraheme treatment arm and 200 patients randomized through the placebo treatment arm. This study was designed to demonstrate superiority on efficacy. The demographics and baseline parameters were found to be well balanced between the two treatment groups with a mean baseline hemoglobin level of 8.9 g/dL in the Feraheme arm and 8.8 g/dL in the placebo arm.

As in the IDA-302 Phase II study previously reported, the primary efficacy endpoints for this study differs depending upon the regulatory body. For European regulatory authorities, we are measuring the mean change in hemoglobin from baseline to week five. For the FDA, the proportion of patients who achieved a ≥2.0 g/dL increase in hemoglobin at any time from baseline to week five is the primary endpoint of this study.

I am very pleased to report today that in IDA-301 Feraheme demonstrated robust efficacy achieving superiority on both primary efficacy endpoints. Patients treated with Feraheme achieved a mean increase in hemoglobin from baseline to week five of 2.7 g/dL compared to a mean increase of only 0.1 g/dL in patients who received placebo. Importantly, these data are consistent with the 2.7 g/dL increase in hemoglobin previously reported with Feraheme treatment in the IDA-302 study. In addition, a ≥2.0 g/dL increase in hemoglobin at any time from baseline to week five was achieved in 81.1% of patients treated with Feraheme compared with only 5.5% of patients who received placebo. These data are consistent with the 84% of Feraheme treated patients who had achieved a ≥2.0 g/dL increase in hemoglobin in the IDA-302 study.

This study also included patient reported outcome instruments to further assess clinical benefit and the impact of Feraheme treatment on these patients. In parallel with the increase of hemoglobin observed a statistically significant improvement in fatigue was demonstrated from baseline to week five in Feraheme treated patients. These data highlight the clinical benefit of increasing hemoglobin in these patients with Feraheme, patients in whom oral iron was not successful in producing the desired clinical effect. Further, data from the IDA-303 extension study will evaluate the durability of this response and the benefits of repeat treatment with Feraheme over time.

Very importantly in this study no new safety signals were observed with Feraheme and the types of reported adverse events were consistent with those scene in both the previously reported IDA Phase III study and the CKD Phase III studies, and also those contained in the approved US package insert for Feraheme. Overall, adverse events were reported in both treatment groups with adverse events reported in 49.2% of Feraheme treated patients compared to 43% of patients who received placebo. As you can see from the adverse event rate in the placebo treated group, this is a population of patients that has many events both non-serious and serious likely related to their various associated clinical conditions.

Patients in both groups reported adverse events that are typically associated with IV irons as a class which for purposes of this protocol were defined as adverse events of special interest. These adverse events of special interest included mild to severe hypotension or hypersensitivity reactions ranging from fever alone to an anaphylactoid reaction and occurred in 3.6% of Feraheme treated patients compared to 1% of patients who received placebo. Cardiovascular adverse events were reported in 0.8% of Feraheme treated patients, all of which were considered unrelated to study drug by the investigators. None were reported in the placebo group.

The frequency of serious adverse events were comparable in both treatment groups with serious adverse events reported in 2.6% of Feraheme treated subjects and 3% of patients who received placebo. The 2.6% of Feraheme treated patients that experienced an SAE in the study is lower than the 4.2% SAE rate reported in the IDA-302 study and is comparable to the 2.5% rate reported in iron sucrose treated studies in the IDA-302 study. As was observed in IDA-302, the reported serious adverse events in both treatment groups were very heterogeneous in nature and no trend or pattern of events was observed to suggest a new safety signal.

Of the reported serious adverse events, four Feraheme treated patients, or 0.7% of patients, experienced a serious adverse event that was considered related to study drug by the investigators. These related serious adverse events, which included three hypersensitivity reactions and one anaphylactoid reaction, were all reversible. The treatment related serious adverse events reported in the study are consistent with the established side effect profile of IV iron products and no new or unexpected safety signals were identified. I’m also pleased to report that to date in IDA-303 there have been no related serious adverse events in that study.

Three deaths were reported in this study; two in the Feraheme arm and one in the placebo arm, all of which were considered unrelated to treatment. The deaths in the Feraheme group were due to the progression of pancreatic cancer in one patient and septic shock in the other patient. Septic shock refers to an overwhelming infection that leads to life threatening low blood pressure. This occurred in a patient with a history of previous episodes of sepsis and multiple ulcers on the patient’s extremities. All deaths occurred more than a month after these patients received their last dose of Feraheme or placebo which further supports that they were unrelated events to study drug treatment.

These are the preliminary top line data that we have available to share with you today. As Amy mentioned at the outset, we have focused this data release on the key points to preserve our options to present the full data set at appropriate medical conferences and scientific journals in the future. We are very pleased that Feraheme has reproducibly demonstrated robust efficacy results and a consistent safety profile that is in line with our expectations and Feraheme’s current label. Further analyses will be performed as we prepare a clinical study report and submit these data for publication.

This concludes the data portion of the call and I’ll now turn it back to Bill for a few quick closing remarks. I thank you for your interest and attention.

Bill Heiden

Thank you, Lee. As you can imagine we’re really pleased with the outcome of this study. On both primary efficacy endpoints Feraheme achieved superiority. As we mentioned, no new safety signals were identified with Feraheme that are outside of our current label for CKD patients. With these results in hand we are aggressively moving forward with the SNDA filing. Based on these data and the data from the IDA-302 study that we reported in March, we believe that Feraheme could provide an important treatment option for patients with iron deficiency anemia who cannot take or tolerate oral iron.

Currently in the US, the only IV irons with a broad IDA label are the older iron Dextran products which were approved many years ago and have boxed safety warnings. The current market in the US for IV iron outside of the dialysis setting is approximately 800,000 grams, of which we estimate half is used for the treatment of CKD – our current label – and the other half is used for the treatment of IDA for other causes, the focus of this current clinical program.

Nearly all this IV iron is being administered to patients in the same clinical care settings where CKD patients get their iron today, primarily hospitals and hematology oncology infusion centers. So should we get approval for this broader IDA label in the US, we can expect a rapid uptake and we will be able to promote and contract with the same customers that we target today with our current sales force. No significant expansion of our commercial footprint will be required to call in these physicians.

I mentioned the significant existing IV iron market opportunity for the broad IDA label but given Feraheme’s profile, we believe that through physician education and increased patient awareness we could expand that market even further. There are approximately 4 million Americans living with IDA today, and for many of them oral iron just doesn’t work and the available IV irons are an inconvenient alternative with boxed safety warnings. Given a practical IV iron alternative with the safety profile of Feraheme, in which a complete gram dose can be delivered in two visits three to eight days apart that makes patients feel better, we believe that more physicians and patients would opt for IV iron and in particular Feraheme.

Small share gains in treating IDA in patients who have not been successful with oral iron represents a significant opportunity for Feraheme. Outside of the US, our partner Takeda will be responsible for filing the regulatory applications with an EU filing expected in 2013 and an EU approval for the broad IDA indication would trigger a significant milestone payment from Takeda.

That just about covers it, and so with that I’ll close our prepared remarks and we’ll open it up for Q&A. Operator?

Question-and-Answer Session

Operator

(Operator instructions.) Your first question comes from the line of Geoff Meacham of JP Morgan. Your line is now open.

Mike – JP Morgan

Alright, thanks – this is actually Mike in for Geoff; I appreciate the chance to ask a question here. I’m curious maybe if you can give us a sense of the specific patient number in this broader IDA indication. You mentioned grams and you gave sort of a total number; I’m just curious what specific patient population you can address with this potentially expanded label. Thanks.

Bill Heiden

Well, why don’t I ask Lee to cover the patient population that was included in this trial, just the various groups that we covered in this trial and then I can expand on that.

Lee Allen, MD

Sure. So as we’ve discussed that the population that we treated, this study was open to enroll any patient with iron deficiency anemia. The only restriction in terms of the patient population restrictions were that they had to have a history of unsatisfactory oral iron therapy or had a history of not tolerating it. So it’s a very broad population – essentially any patient with iron deficiency anemia who has that history would qualify for treatment. So that translates in the marketplace to a relatively large number. So I don’t know if you want to add more specifics around the sizing of those target populations.

Bill Heiden

I’ll start with there’s not great data, but our estimates is that there are about 250,000 patients currently that are outside dialysis and outside of CKD, our current indications. So 250,000 patients annually who are treated with IV iron, and so that’s the opportunity and that translates roughly into that 400,000 additional grams of IV iron. But beyond that obviously we believe that with the approval of a product such as Feraheme with its efficacy and safety profile that we would hope that more patients who are failing oral iron in the market would be offered an opportunity to take a product like Feraheme, a couple of doses over say a one-week period could resolve their symptomatic anemia instead of struggling along with the tolerance issues of oral iron; or in many cases, patients just stop taking their oral iron and learn to live with chronic anemia.

Lee Allen, MD

And just to add onto that comment, I mean clearly patients now that don’t tolerate oral iron, many of them remain untreated and it’s really because of the limited treatment options that are available. So again, the current IV iron market that Bill’s talked about is going to include a lot of patients that have failed oral iron and are not being treated because physicians are not comfortable using an iron Dextran to treat that patient population. So there’s a large opportunity for market expansion on top of the established market that we know about.

Mike – JP Morgan

Great, thanks.

Operator

Your next question comes from the line of David Friedman from Morgan Stanley. Your line is now open.

Sarah – Morgan Stanley

Hi, this is Sarah calling for Dave. I just had a quick question on your marketing strategy here. I know that you’ve mentioned that you don’t expect a significant increase in sales force but it seems like there are some additions here that you might not be targeting right now, like GYN for example. I just wanted to get a better sense of do you expect kind of a reorganization of marketing strategy? Would you partner with someone to reach this broader physician base? What are your thoughts there?

Bill Heiden

It’s a great question, Sarah, and you’re absolutely correct that we are focused today on the treaters who are administering IV iron, and there’s a whole new group of physicians with a broad IDA label such as the OB/GYNs that you mentioned.

I’ll just give you an example of one of the very effective ways to reach physicians like that is to take a treating physician in the local community and have those physicians speak at an educational session where a group of local community OB/GYNs are invited in; and that local treating physician talks about new advances in IV iron therapy and educates those local OB/GYNs about new advances and the fact that it would be appropriate to revisit their referral of anemic patients and perhaps increase the number of patients that are referred on for IV iron.

And in that instance you wouldn’t need to increase your commercial footprint; it would just be a slightly different strategy in the field to plug into those existing referral patterns where certain community OB/GYNs are referring into one physician at an IV infusion center and that’s a natural setup for a terrific educational session.

Lee Allen, MD

So again, just to add on, Bill, there’s an opportunity for the medical affairs group to really provide education to the community opinion leaders in those areas to, as Bill said, bolster the referral pattern. So we’re going to look at an opportunity to align those two very strongly to maximize the market for this product.

Sarah – Morgan Stanley

Great, thank you.

Operator

Your next question comes from the line of Eun Yang from Jefferies. Your line is now open.

Eun Yang – Jefferies & Company

Thanks very much. So based on the number of grams that are currently being used in the IDA market for IV iron, based on your current (inaudible) pricing you’re talking about a $200 million market opportunity in the US. Can you comment on what the market opportunity would be in the EU also and in the US, that $200 million market opportunity, what your assumption in terms of penetration in this setting? Thank you.

Bill Heiden

So let’s see; maybe I’ll parse that into two parts. So in terms of the US, we currently have about 25% market share in the oncology hematology setting and about a 7% share in the hospital setting. And I guess if you wanted to think about it from a dead start today since these are the same treating positions if we were to broaden the label, double the market size – you could think about a virtual and sort of an immediate doubling of our sales volume. But obviously our share is also increasing quarter-on-quarter and so that’s a moving target that happily for us is moving up. We haven’t given guidance for 2013 and that will likely come later this year.

In terms of the European opportunity, the European IV iron market is about €130 million but you’ve got to tease that out a bit because within that segment there are some low priced IV irons and there are some new, higher priced IV irons; and I believe that Takeda is targeting to come in appropriate with the profile of the drug at a premium price. And so you’d have to run through the numbers – instead of €130 million it’s probably a low mark that will grow as people transition from the older IV irons to the newer IV irons. And I don’t believe that Takeda has given any guidance in terms of what they’re looking for; what I can tell you is they’re certainly committed to the brand and we’ve been working very, very closely with Takeda on their pre-launch and launch plans for the EU.

Eun Yang – Jefferies & Company

Okay, so €130 million – that’s for only the IDA market, not CKD, correct?

Bill Heiden

No, that’s the entire IV iron market in Europe.

Eun Yang – Jefferies & Company

Oh, I see. Does that include dialysis?

Bill Heiden

Yes it does.

Eun Yang – Jefferies & Company

Okay, alright. And then two more questions: so what’s the average dose currently in the pre-dialysis setting and also you said it’s going to be similar in the IDA setting?

Lee Allen, MD

Okay, I’m not sure what you mean by the pre-dialysis…

Eun Yang – Jefferies & Company

Pre-dialysis of the patient, what’s the usual dose or grams of IV iron they are getting per year?

Lee Allen, MD

Oh, per year. So again, there aren’t really exact numbers around this. We know in the dialysis population it’s 2.0 grams to 4.0 grams per year. Our estimates in the non-dialysis CDK population are approximately 1.0 grams to 2.0 grams per year.

Eun Yang – Jefferies & Company

How about in the IDA? In the clinical trials, what was the average dosing of the patients?

Lee Allen, MD

So again, in the 301 and the 302 studies we administered a gram, or two doses of 510 mg. We are re-dosing patients in the extension study, IDA-303. Those data are not currently available but in that study we’ll get an estimation of the question you’re asking about, how frequently do these IDA patients require IV iron treatment.

Eun Yang – Jefferies & Company

Okay, the last question: in terms of IDA European opportunity, you said that Takeda is filing next year for potential approval. What’s the milestone payment related to the EU regulatory event for IDA?

Bill Heiden

Right. So we haven’t disclosed the exact number. What we have disclosed is that the initial European approval for CKD for approval and launch was a $30 million milestone, and the IDA approval would be a larger opportunity and you’ll just have to make your estimates from there. But we think it’s a big opportunity in there so there’s a significant milestone that will be payable to AMAG.

Eun Yang – Jefferies & Company

Okay, thank you.

Operator

(Operator instructions.) Your next question comes from Carol Werther from Summer Street. Your line is now open.

Carol Werther – Summer Street Research Partners

Thanks for taking my question. How many salespeople do you have now?

Bill Heiden

We currently have 43 sales representatives. We also have a managed care team calling on the buyers if you will in the group purchasing organizations and on the medical side we’ve got a strong medical team who supports our sales efforts in terms of answering questions and fielding inquiries about research.

Carol Werther – Summer Street Research Partners

But to really double the sales in IDA opportunity you don’t think you’ll need more sales reps to target a different group of people? Could you just explain why?

Bill Heiden

Sure, sure, it’s a good question, Carol. What’s important to think about is for IV iron there is a distinct segment of treaters, and we call on virtually all of those physicians. So whether it be oncology hematology infusion offices or outpatient hospital settings, we call on all of those settings. And so we are talking to the treaters of these patients. But to your point there’s a larger referral network that exists today. Those patients are coming in from either community nephrologists, OB/GYNs, gastroenterologists; and those referral patterns are well established and so we don’t have to change those in any way. Those are well established today.

And so you can imagine, and I’ll just give you a very, very specific example, that in a hematology oncology office, A.) today, there’s 100 patients that are being referred in for IV iron therapy within that local community. We’re getting the CKD patients but we’re not necessarily getting the broader label IDA patients because that’s not in our label and we can’t promote for those patients. In the future with an approval we’d be able to promote for those patients and hopefully we’d get all of that office’s IV iron patients.

And there was a question earlier about expanding the market, and maybe that’s where your question is leading because there are a lot of patients who are failing or are intolerant to oral iron therapy and who are not necessarily being offered the opportunity of an IV iron treatment, and that’s where local community educational programs will come into play where we will sponsor educational programs – local treating physicians speaking to their network, their referral network about new advances in IV iron therapy and ensuring that patients who are failing or who have failed oral iron therapy, that they’re offered an alternative of Feraheme when it is approved. Is that clear, Carol?

Carol Werther – Summer Street Research Partners

Yeah, that’s helpful.

Lee Allen, MD

I was just going to add on to Bill’s comments. There’s an upside synergistic application of our approval in IDA. We know from customer feedback or from physician feedback that some of the treatment centers, their preference is to stock a single IV iron. So since we don’t have a broad label they haven’t switched to Feraheme; so with the broad label we’ll gain those treatment centers which again, picks up the IDA patients but also picks up additional CKD patients that we haven’t had access to. So that’s an additional upside.

Carol Werther – Summer Street Research Partners

Okay, thank you.

Operator

(Operator instructions.) You final question comes from Matt McKinsey from Robert W Baird. Your line is now open.

Matt McKinsey – Robert W. Baird & Co.

Thanks. I just had one quick question on the safety. I noticed that you quantified the adverse events of special interest for Feraheme patients on this trial. Just looking back on the 302 press release I don’t think it was quantified, so I’m just wondering is it safe to assume a similar number? I think is it 3.6% in the 301 trial – should we assume something similar to that in the 302?

Lee Allen, MD

I think we did release the percentage in the 302 study – it was 2.7%. So they’re comparable.

Matt McKinsey – Robert W. Baird & Co.

So that’s 2.7% experienced adverse events of special interest?

Lee Allen, MD

Yes, that’s correct.

Matt McKinsey – Robert W. Baird & Co.

Okay, perfect.

Lee Allen, MD

And you might recall also in the 302 study that the iron sucrose group had a 3% rate… No actually it was a 5% rate of adverse events of special interest so it was actually higher in that trial in the iron sucrose.

Matt McKinsey – Robert W. Baird & Co.

Perfect, thank you.

Operator

If there are no further questions at this time I’d like to turn the call over to Amy Sullivan.

Bill Heiden

Actually it’s Bill and I’ll just close it out here. We thank everybody for their attention here this morning. As mentioned at the outset we’re really pleased with the results here today, both in terms of efficacy and safety, and now we’ll plow forward and put together our SNDA filing for the broad NDA label which we intend to file later this year. Thank you again.

Operator

That concludes today’s conference call. You may now disconnect.

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