AMAG Pharmaceuticals Inc. Q2 2008 Earnings Call Transcript

| About: AMAG Pharmaceuticals, (AMAG)

AMAG Pharmaceuticals Inc. (NASDAQ:AMAG)

Q2 2008 Earnings Call

July 29, 2008 8:30 am ET


David A. Arkowitz – Chief Financial Officer, Chief Business Officer

Brian J.G. Pereira, MD – President, CEO

Kristen Galfetti – Senior Director of Investor Relations


Adam Walsh – Jefferies & Company, Inc.

Marshall Urist – Morgan Stanley

Mark Monane – Needham & Company

Andrew Berens – Merrill Lynch

Carol Werther – Summer Street Research Partners


Good morning. My name is Brooke and I will be your conference operator today. At this time, I would like to welcome everyone to the AMAG pharmaceutical second quarter earnings release conference call. All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a Question-and-Answer session. (Operator Instructions)

Thank you. I will now turn the call over to Kristen Galfetti, Senior Director of Investor Relations. Ms. Galfetti, you may begin your conference.

Kristen Galfetti

Thank you, Brooke. Good morning everyone. I would like to welcome to our second quarter 2008 earnings results conference call. Today we will be discussing our financial results, business highlights and development program. Our call today will reference the press release we issued this morning which is posted on our website at

The agenda for our call today will begin with our Chief Financial Officer and Chief Business Officer, David Arkowitz, who would discuss our financial results for the quarter. Next, our President and Chief Executive Officer, Brian Pereira will follow with a brief discussion of the company’s accomplishments and steps that we are taking to become a commercial, biopharmaceutical company. This will be followed by a question-and-answer period.

Before proceeding with this call, please be reminded that any statements we made during the course of this conference call that are other than the historical facts including statements regarding our financial condition, development program, the expected US launch of Ferumoxytol in the first quarter of 2009, our ability to liquidate our auction rate security investments, the impact of current auction rate securities and liquidity on our operations and business plans, and our intent to initiate addition clinical programs in patients with iron deficiency anemia in 2008.

Our 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.

Such risks and uncertainties include the possibility that we may not be able to obtain the necessary regulatory approvals in order to market and sell Ferumoxytol or we may not obtain such approvals in a timely manner, the fact that we have had limited sales and marketing expertise, uncertainties regarding our ability to successfully compete in the intravenous iron replacement and imaging market, uncertainties regarding our ability to obtain favorable coverage, pricing and reimbursement for Ferumoxytol if approved, uncertainties regarding our ability to manufacture sufficient quantities of Ferumoxytol to meet demand if approved, uncertainties relating to our patents and proprietary rights and other risks identified in our Securities and Exchange Commission filings.

Any forward-looking statements that we make today must be considered in light of these factors. The assumptions on which we base any forward-looking statements and our perception of the factors influencing those assumptions are highly likely to change overtime. However, our company policy is to provide forward-looking statements only at certain points in the year, such as during the calls like this one. We do not plan to otherwise update such statements. Actual results may differ materially.

I will now turn the call over to our Chief Financial Officer and Chief Business Officer, David Arkowitz.

David A. Arkowitz

Thank you, Kristen and good morning everyone. Today we reported unaudited, consolidated financial results for the second quarter of 2008. Revenues for the quarter ended June 30, 2008 with $0.5 million as compared to revenues of $0.7 million for the same period in 2007.

Total operating costs and expenses for the quarter ended June 30, 2008 were $19.7million as compared to $10.3 million for the same period in 2007, an increase of $9.4 million. The increase in operating cost and expenses was primarily due to increased selling, general, and administrative expenses as the company prepares for the expected US launch of Ferumoxytol in the first quarter of 2009.

As you recall at our Analyst and Investor Day in June, we said that we expected our spending to increase significantly over the remainder of 2008 as we prepare for commercialization and initiate additional clinical trials from (inaudible 00:07:12).

Our second quarter total operating cost and expenses reflected and as compared to the first quarter of this year, are about $6.5 million higher.

We reported a net loss of $17 million or $1 per basic and diluted share for the quarter ended June 30, 2008 as compared to a net lost $6.9 million or $0.46 per basic and diluted share for the same period in 2007.

For the 6 months ended June 30, 2008, we reported revenues of $1.1 million as compared to $1.7 million for the same period in 2007. Total operating cost and expenses for the 6-month period ended June 30, 2008 were $33 million as compared to $19.4 million for the same period in 2007.

Similar to the second quarter, the increase in operating cost and expenses was primarily due to increased selling, general, and administrative expenses. The net lost for the 6 months ended June 30, 2008 was $26.3 million or $1.55 per basic and diluted shares compared to a net loss of $17.1 million or $1.17 per basic and diluted share for the same period in 2007.

At June 30, 2008, our company’s cash, cash equivalents, and investments total approximately $264 million, which is a decrease of $11.6 million from our March 31, 2008 balance. Excluding stock option proceeds and unrealized investment gains and losses, our cash burns for the second quarter was $10 million. Our cash burn over the 12-month period ended June 30, 2008 has been approximately $30 million.

As I have done in the last several earnings conference calls, I would like to provide some additional information regarding our auction rate securities. First I will just remind everyone that our auction rate securities are only those that are municipally and principally student loan backed auction rate securities. We and other holders have similar auction rate securities have experienced continued auction failures.

Our auction rate security balance as of June 30, 2008 using the par value of these securities was approximately $69 million, which reflect approximately about $3 million from March 31, 2008 due to redemptions by certain issuers during the second quarter. All of these redemptions were at par value.

We have estimated the fair value for auction rate securities using discounted cash flow analysis and by incorporating assumptions that market participants would use in their estimates of fair value. Therefore, we are recording a temporary impairment relating to our auction rate securities as of June 30, 2008 in the amount of $4.4 million, which is an increase of about $1 million over the amount that we had recorded as of March 31, 2008.

As a result, our auction rate security balance as of June 30, 2008 is $64.5 million. We do not believe that any of our auction rate securities are presently at risk of default and we continue to receive interest payments in accordance with their terms.

All of our auction rate securities are AAA or AA-rated by either S&P/Moody's or Fitch and over 95% of these holdings are collateralized by student loans guaranteed by the US Government under the Federal Family Education Loan Program or FFELP with the rest guaranteed or collateralized by municipalities and further backed by bond insurance companies.

Given the credit quality and collaterals securing our auction rate securities, we currently believe that we will ultimately be able to liquidate our investments without significant loss. We classify our auction rate securities as long-term investment as of June 30 except for those that have been called or for which we have received notes of the issuers and tend to redeem.

As of June 30, 2008, in addition to our auction rate securities, we had approximately $200 million in cash and other investments held primarily in the form of US Government debt, corporate debt, commercial paper and money market funds. Therefore, we continue to believe that the current liquidity challenges with our auction rate securities will not materially impact our ability to fund our operations and execute our business plans. I will now turn the call over to Brian for his comments.

Brian J.G. Pereira, MD

Thank you, David. During the past quarter, we focused on preparing or anticipated commercial launch of Ferumoxytol in the first quarter of 2009 and continue to made progress towards becoming a commercial biopharmaceutical company. We are proud of the many accomplishments over the past several months. Let’s continue to drive the company forward.

As we draw closer to our PDUFA date scheduled for the second half of October, we continue to have a productive, ongoing dialog with the FDA, typical of this stage of the review process.

As of today, we have not being notified by the FDA of an advisory committee meeting. We will update you if we are informed, second advisory committee review is planned.

In May, we presented positive results in poster of pooled data from two open-labeled multicenter randomized Phase III studies of Ferumoxytol and intravenous iron replacement therapy at the 8th and 9th Transplant Congress. The poster presented results from 31 patients with chronic kidney disease stages 1 to 5 with functioning kidney transplants.

In addition, the Journal of the American Society of Nephrology online edition featured previously presented data from the 1st trial of 304 patients in non-dialysis dependent CKD, who are randomly assigned to treatment with either IV Ferumoxytol or oral iron. This information will be available in the print version of the Journal of the American Society of Nephrology in August. We have many more presentations and publication planned for the months ahead.

In May, we also announced the strategic partnership with 3SBio, Inc., a leading Chinese Biocare company to develop and commercialize Ferumoxytol as a therapeutic agent in China for the treatment of iron deficiency anemia in patients with chronic kidney disease, with an option to expand into additional therapeutic indications.

We are excited about this partnership as it signifies a great example of the type of relationship that is attractive to us and creates value for our shareholders by allowing us to reach more iron-deficient anemic patients around the world.

As we more forward with our commercialization plan for Ferumoxytol in CKD patients in the US, we continue to evaluate opportunities where Ferumoxytol could be used in markets outside the US.

As we have discussed in the past, the attractiveness of commercializing Ferumoxytol’s use in these markets varies greatly and is driven by pricing and reimbursement, patient access to dialysis, and the role of iron in local treatment protocols. We continue to evaluate those markets that we consider to be attractive and the best way to enter them. Options may include partnerships, distributorships, and collaborations.

We continue to explore expansion of our renal franchise through business development activities to leverage our renal expertise and investment. As we have mentioned during our last call, we do not expect to announce any new developments into space until after Ferumoxytol’s launch in the first quarter of 2009. We look forward to updating you on our progress in 2009.

In May, we launched a non-product specific disease state advertising campaign in major nephrology medical journals that many of you may have seen. The intent of this campaign is to drive early identification and treatment of iron-deficiency anemia and CKD. This advertising campaign also aims to further strengthen AMAG’s image as an emerging leader in the field of nephrology and as a partner of choice to the physician community. Our branch specific advertising campaign will begin following FDA approval and will focus on driving product and option in patients with iron-deficiency anemia with all stages of CKD.

Our medical affairs group also continues to grow. In May, Dr. Robert Brenner joined AMAG’s senior management team and is responsible for the company’s medical affairs and nephrology clinical development activities. Rob comes to us from Amgen where he served in a variety of nephrology leadership roles, both in clinical development and medical affairs. Rob brings experience in new product approval, designing clinical trials, and has acted as a key liaison to the nephrology community, professional societies, and regulatory agencies. We are delighted to have him on our team.

In June, at our Analysts and Investor day, we provided investors with an in-depth look at iron-deficiency anemia and CKD patients and an update on plans for Ferumoxytol’s next indications. We discussed our commercialization strategy that will seek to maximize Ferumoxytol’s cube in the dialysis market segment by capturing market share from existing IV irons and our plans to simultaneously expand into the untapped non-dialysis market segment.

We also provided an update on our clinical development plan. We discussed our intent to initiate two additional Phase III clinical development programs for Ferumoxytol as an intravenous iron replacement agent. Our program would include patients with iron-deficiency anemia and abnormal uterine bleeding, and the second will include patients with iron-deficiency anemia from multiple causes.

We also announced plans to commence a Phase II study for Ferumoxytol in vascular-enhanced magnetic resonance imaging in patients with peripheral arterial disease. Final study designs are subject to FDA review and are expected to begin in the second half of this year.

As we have said in the past our strategy is to market and sell Ferumoxytol ourselves in the US. The staffing of our commercial deeds is one of our key success factors, and we are on track with our staffing plans. Many qualified and experienced candidates are seeking out AMAG for employment opportunities because they believe, as we do, that Ferumoxytol has the potential to be a game-changing product.

As planned, we have completed our hiring of our head of sales and our national sales directors. In addition, we have nearly completed the hiring of our frontline sales management team, all of whom have experience in the renal therapeutic area. We are now actively recruiting sales representatives and plan to have that process completed by October.

Finally, our manufacturing scale of efforts are on track as we near completion of our hiring plans for our production and quality control staff. We continue building Ferumoxytol inventory at our commercial scale GMP manufacturing facility. We are also now engaged in the process and analytical technology transfer to our second source manufacturers who are expected to augment the Ferumoxytol commercial supply in order to meet the demands of the marketplace.

We are very happy to continue to share our profits with you as we have every quarter. These successes along with our growing experienced management team and strong cash balance provide a firm foundation to a successful launch of Ferumoxytol in the US and the development of additional indications. We look forward to updating you on our progress at the upcoming investor conferences over the next few months.

This completes my prepared comments. We will now turn the call back to the operator to conduct the question-and-answer session of this call. Operator?

Question-and-Answer Session


(Operator Instructions). Your first question comes from Adam Walsh with Jefferies & Company.

Adam Walsh – Jefferies & Company, Inc.

Good morning, thanks for taking my question. My first question is on the potential for panel. Prior to it, are we beyond the date when a panel would like to be called, if we look at for instance the timeline around the objectives from the PDUFA date to when the panel was held and go back from there to where the panel was announced. It seems like a panel should have already been announced by now.

Are we beyond the date, when it would be announced then, will there be kind of a line on the sand where we will know at some point, or maybe the FDA has decided not to call an advisory panel for Ferumoxytol? Thanks.

Brian J.G. Pereira, MD

Well Adam, your calculations are roughly correct. As you know, according to produce sub four (ph 00:20:33), a panel is required for all new chemical entity. But iron in CKD is well-studied, there have been several approved irons on the market, and iron as a therapy has been around for several decades.

It is, of course, argumentatively up to FDA discretion, we are fully prepared in case a panel is called. If the FDA contacts us regarding a panel, we feel this is important information that we need to share with investors and we will probably disclose this information to you.

As I said earlier we have and continue to have a productive on-going dialogue with agency which is difficult for this phase of the review cycle. I have mentioned earlier in my prepared comments that the agency has not contacted us thus far with respect to an advisory panel and we for one would not want to speculate as to what it means, it is what it is, at this point.

Adam Walsh - Jefferies & Company, Inc.

Great, and then a quick follow up here. I have been kind of hearing out there that pre-approval manufacturing inspections might have begun. I wonder if you could comment on that and then also on the (inaudible 00:21:48) advisory panel, there were some discussion on risk management and I am curious as to whether or not you have engaged the FDA and any source of risk management at this point, thanks.

Brian J.G. Pereira, MD

Adam, as you likely point out that pre-approval inspection of the manufacturing plant, the inspection of some of the clinical sites particularly the heavy end rollers and the inspection of the sponsors’ site are typical positives that do take place prior to the PDUFA date. We do not share the progress of each specific event with the investor community. Again, the risk management plan is also part of discussion that take place with agency during the latter half of the review cycles, and again we try to stay away as it’s difficult for us to form specifics of our discussions with the agency and where we are.


Your next question comes from Marshall Urist with Morgan Stanley.

Marshall Urist - Morgan Stanley

Yes, hey guys, good morning. So a follow up on that question, you know, we have seen lots of administrative delays from the FDA recently. So, I wonder if we qualitatively talk about progress, your sense of the progress of the review and to what extent that could impact whether the timing on when we might hear about the panel.

Brian J.G. Pereira, MD

Well Marshall, thank you for your question. Let me elaborate on that as much as I possibly can. The reality is there have been administrative delays for some entities but not all. The agency uses its resources based on its priority. As we have consistently said that the review of the intravenous iron therapy for chronic kidney disease is a path that the agency has traveled at least five times in the past, a couple of decades.

The only difference with Ferumoxytol is the new chemical entity which has unique properties. The pre-clinical, the clinical safety and efficacy data that we have submitted to the agency have been robust and as complete as possible.

So, at this stage as I said earlier, we continue to have the principal discussions that one does have at the late stage of review cycle B PDUFA, whether the delays or the secular delays that have affected some drugs applies to us, if the agency does inform us that that's the case, we think it would be material, and we will share it with you.

To this point, the agency has not informed us of a potential delay and the agency has not informed us of the potential panel, so we are functioning based on our confidence of our submission document in the NDA. We are making plans for commercial launch based on second half of October to do so.

Marshall Urist – Morgan Stanley


Brian J.G. Pereira, MD

I hope that answered your question Marshal as clearly as I can.

Marshall Urist – Morgan Stanley

Yes, thanks Brian. Next one is, is there any update you can give us on --- I know we talked about this at the analyst day, but on -- have you had any more interaction or made progress on trial designs for the next studies outside of renal disease?

Brian J.G. Pereira, MD

We have made tremendous progress on all our three major clinical development programs, that means our program for the use of intravenous iron in women with abnormal uterine bleeding, are programmed for developing Ferumoxytol as an intravenous iron therapy in a broad range of iron deficiency anemia indications, including cancer in GI and the 12 programs is a Phase II program for Ferumoxytol use at magnetic resonance angiography agent.

We continue our discussions with the agency; our clinical operations team has lined up all the requirements to launch these trials during the second half of this year. So, as you would expect, the launch of these products won't require us to receive a verifiable sign off from the agency and we are dotting the I's and crossing the T's as we prepare to launch these trials. You can look forward to hear from us about the start of these trials during the up coming months.


Your next question comes from Mark Monane with Needham.

Mark Monane – Needham & Company

Good morning to New York City. Question is based on the data from the CKD patients, earlier stage 1 through 5. Can you outline to us, what you think the key points are from the clinical studies to date, and importantly what does the market research tell you about the potential of Ferumoxytol in this population which doesn't traditionally get IV iron or dialysis. Clearly the stage 6 patients are in the dialysis lab. But 1 through 5, they are iron deficient in many cases, what does the market research tell about the potential of IV iron therapy in this population?

Brian J.G. Pereira, MD

Sure, Mark I think you've raised an important issue as to how do CKD stages 1 through 5 on (inaudible, 00:27:57) dialysis get treated today, and what's the opportunity for Ferumoxytol and how do clinical data drive us in that direction.

Of course these are clinical studies in stages 1 through 5 have shown than Ferumoxytol significantly will begin through hemoglobin levels and its performance is far superior to oral irons which does far has been the standard of care.

The second point is that Ferumoxytol performs equally well in patients who are on erythropoietic agents and patients who are not in erythropoietic agents. In fact, Ferumoxytol given as a monotherapy to patients who are not an erythropoietic agent showed an impressive increase in hemoglobin of almost a gram, which has important pharmacological to economic implications.

The question that you raise is -- had then of course the safety profile of Ferumoxytol has been impressive. In terms of market implications, as you know oral iron has been the standard care in pre-dialysis CKD patients and our intent was to show -- to demonstrate the safety, the efficacy and more importantly the convenience of Ferumoxytol in pre-dialysis or non-dialysis CKD indications.

Consequently, if you look at our clinical study results, they have been heavily weighted towards pre-dialysis CKD patients because we wanted to demonstrate in physician offices that Ferumoxytol is a safe, efficacious and convenient treatment. The question you raised is well -- these patients are not generally given intravenous iron.

The reality is it’s close to a billion dollars of erythropoietic agents that are administered in the physician offices, so nephrology offices are comfortable providing injectible drugs; they are delivering injectible drugs to a close to 300,000 patients in the pre-dialysis arena today. I believe that the launch of Ferumoxytol, which our commercial team has prepared as well for, will drive Ferumoxytol use in the physician offices as well.

Mark Monane - Needham & Company

And that was very helpful in the US and do you have any comments on ex-US on the behavior or the skill set of the nephrologist outside the US in similar population?

Brian J.G. Pereira, MD

Sure. Outside the US, treatment of chronic kidney disease continues to be lagely hospital-based and hospital-clinic based, and often times, hospitals stock injectible drugs for these patients and so that would make the keys of entry of Ferumoxytol a little smoother, but as I have said earlier we are in the process of evaluating the exact of pathway for commercialization ex-US.

We have nearly done in China. We are in the process of looking at the other [inaudible 00:31:10) country and looking at Europe and South America as well , as well as the other North American countries, so stay tuned over the next few quarters, you will see more about -- our plans for this markets.


You’re next question comes from Carol Werther with Summer Street Research.

Carol Werther – Summer Street Research

Thanks for taking my question. Brian, if you were to have a FDA Advisory Panel, who would be on this panel, do you imagine? Would it be the safety committee or joint safety committee again?

Brian J.G. Pereira, MD

Oh that is good question Carol that we pondered internally as well. First is, as I have said several times in the quarterly, a panel is summoned when the FDA has a specific set of questions to the panel. These questions broadly are questions about the efficacy of the drug or questions on the safety profile of the drug.

The efficacy profile of our drug is therefore all of you to see. We have also found the control of oral iron across every study with P values less than 0001, so it is hard for us to come up with a set of efficacy questions that the FDA could ask the panel.

On the safety side again, all our data has been presented to you, our investors, as well to the scientific community. The safety profile of the drug is extremely robust. The mortality among the Ferumoxytol-treated patients has been lowered (inaudible 00:32:55) of cardiovascular events rates have been lower and even the SAEs and AEs , if you take away related and unrelated have been very, very impressive. I mean, in fact even competitors (inaudible, 00:33:10) in a blinded matter, Ferumoxytol shows very well.

So, it is hard for us to understand as to what are the sets of safety questions that the agency could post to a panel. Consequently, the questions that we have is that we do not know what are the potential set of questions the FDA could ask a panel and hence, that the leads of question that you ask for to tackle the panel – its hard to speculate as to what type of panel would be.

Carol Werther – Summer Street Research Partners

Thank you. I just would like to ask another question, so you plan to be downhiring the sales by October, how many people have you hired thus far and should we expect the spending to increase quarterly as we head towards the launch?

Brian J.G. Pereira, MD

The answer to that is depends – we bring -- our sales and marketing management infrastructure which has been placed now for quite a while as our hiring of the frontline sales management which is the district managers is complete. And we will complete our sales for hiring in the September-October timeframe.

As we have said in the past, our frontline sales folks and the managers is in 80 – in the range of about 80 individuals. The spending, clearly as we move to a drawn to (00:34:42) going to increase commercialization involves a large amount of preparation that includes reimbursement, (00:34:51) marketing of products, specific marketing, other launch-related expenses, and a wrap up in our personnel as we put field sales force in place, as well as put our medical funds to the (inaudible 00:35:07) and build up a medical sales team and finally, as you know, we’re going to launch additional clinical trials in three big programs.

So, that’s then will increase our spending in the past has been extremely low. Our trailing cash bond for the last twelve months has been a meager $30 million. That’s clearly going to go up in the quarters ahead.


Your next question comes from Andrew Berens with Merrill Lynch.

Andrew Berens - Merrill Lynch

Hi. Thanks. Brian, I just want to hear your thoughts. Would you, at this point, be more optimistic about the outcome of the PDUFA, if you had to notify of an outcome or are you concerned that the confirmed calendar dates on the FDA side has been posted to December and you’ve not yet been notified?

Brian J.G. Pereira, MD

Andy, that’s a good question. Thank you. I have confidence was high when we submitted NDA because we believed that we had a robust clinical efficacy and safety data set and we put together the data package we could. Nothing from the time we submitted to date has changed our confidence and hence we continue to drive forward as was our original plan with respect to this thing which is significant towards the commercial launch of the product.

Andrew Berens - Merrill Lynch

But are you more or less optimistic, given the silence, and then have you had these discussions with the agency? You told us that they’ve been very transparent and productive. I would assume in the final trimester you would know by now if there’s going to be an amendment requirement to have a panel before approval.

Brian J.G. Pereira, MD

I think your, Andy, the question that you raise is the one that I’ve partially answered so maybe I’ll be more clear that – yes, we are at the advanced stage and I like the term, we are in the final trimester of this start of (inaudible 00:37:12) and we are no less or more confident than we were when we started.

We believe that we have collaborative discussions with the agency that are typical for this stage of the review cycle. The fact that we are moving ahead with the span required for a progressive commercial launch speaks to our level of confidence.


Your next question comes from Adam Walsh with Jefferies & Company.

Adam Walsh - Jefferies & Company, Inc.

Hi. Thanks for taking my follow-up. There’s been a lot of chatter about the recent Fresenius deal for Vinofer and how that might impact your ability to penetrate to Fresenius (inaudible 00:37:58) once Ferumoxytol is approved.

Could you comment on that and also should we read in to anything on the fact that Dr. Allen Nissenson, who was the former chair of your Ferumoxytol Scientific Advisory Board recently joined DaVita as Chief Medical Officer, how much will that relationship impact to your ability to penetrate DaVita? Thanks.

Brian J.G. Pereira, MD

Thanks Adam. Let me take your first question first. I think that Dr. Ben Lipps who is the CEO of Fresenius has well articulated his view of why they are attempting to license Vinofer. We believe that Fresenius is a high-minded company which has its patient’s best interest in mind and as a consequence, we believe that Fresenius, like all other dialysis chain will see the clinical benefits of Ferumoxytol in its clinics and we will have the opportunity to provide Ferumoxytol to patients in all dialysis chain including Fresenius when we launched the product.

With respect to Dr. Nissenson’s joining as the Chief Medical Officer of the DaVita speaks to the quality of key opinion leaders that we have always had on the scientific advisory board of AMAG and that we will continue to have that we move to launch. We believe that for the Ferumoxytol has ardent advocate on the medical side in all of the dialysis chain, Dr. Nissenson’s being one among them and we hope that at Ferumoxytol will get it right it rightful place in all the lives at small dialysis chain including the (inaudible 00:39:50).

Adam Walsh – Jefferies and Company, Inc.

Great, thanks and then just one more here, on the design of the AUB and IDA studies, your discussions with the FDA on the design of those trials, is that with the same members of the agency who are currently reviewing the Ferumoxytol NDA, in other words, do you have discussions on both on the NDA with these folks and also on the designed execution of the upcoming trials? Thanks.

Brian J.G. Pereira, MD

Adam, that is absolutely correct. The AUB and iron-deficiency anemia trial are under the full view of that same division as that which reviewed our CKD submission. In fact, -- just as a quote of the function of the agency, imaging application will also be reviewed by the same division that interviewing our therapeutic indications.


(Operator Instructions) Your next question comes from Marshal Urist with Morgan Stanley

Marshall Urist – Morgan Stanley

Yes, thanks for the follow up guys, so just on that one, on the last subject. Is it still your expectation for the new based retrials that the Safety Follow up and Retreatment design is going to be similar to the nephrology studies where you had an investigator option to retreat while the protocol is open or are you being guided towards something more formal?

Brian J.G. Pereira, MD

Marshall, largely our clinical design will be similar to that which we employed in the chronic kidney disease patients, whether we will have an open label repeat dose opportunity or not, we’re still in discussions with the agency whether that is something we want to do or not, we look at that as a fairly straight forward, we treated with one gram say, hemoglobin gets better compared to the control or not.

Marshall Urist – Morgan Stanley

Okay, so that’s --

Brian J.G. Pereira, MD

I just said frequently in the past, the treatment of iron-deficiency anemia is to put the emphasis treatment of iron deficiency. So if the patient required another dose of 1 gram of iron later in the course of the clinical trial that is still open or not, we are still debating that and I am having discussions with the agency whether we wanted to do that or not. The agency views this as a necessary treatment of iron deficiency anemia.

Marshall Urist – Morgan Stanley

Okay thanks for the detail. And then David, could you talk a little bit more about spending ramp over the rest of the year, I mean, if we look at the sort of the head count graft, do you guys showed that the Analyst day, there are still, and if you guys are still sort of, on that same trajectory, there is a lot of head count that still needs to be done, so were there any sort of one time start up cost or any thing else, as you sort of build that infrastructure better in the numbers this quarter or is, or is this sort of just the beginning of the ramp that we should expect?

David A. Arkowitz

Marshall, I think this really is the latter, the beginning of the ramp. Our head count actually sitting here today is over 150 employees, as Brian alluded to, we are going to be adding sales reps over the next several months that will cause a ramp-up, preparing, continued preparations for the launch of Ferumoxytol. We will continue to ramp up the expenses, continue in building inventory, initiating new clinical trials will all add to the increase in the spending over the third and fourth quarters and beyond, so its really, the latter option that you said, that its the beginning of the ramp.


(Operator Instructions) At this time there are no further question, do you have any closing remarks?

Brian J.G. Pereira, MD

We would like to thank all our investors for joining this call. We had a very exciting phase here in the last couple of months before our PDUFA date. We prepare for launch. We look forward to updating you on many more exciting things that are happening at the AMAG as the investor conference calendar rolls out this fall.

Thank you very much and have a great day.


Thank you. That concludes today’s conference call, you may now disconnect.

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