Small-Cap Expert Eyes AMAG Pharmaceuticals

07/20/2015 8:00 am EST


James Oberweis

President, Oberweis Asset Management, Inc.

This featured stock, founded in 1981, is a specialty pharmaceutical company focused on the therapeutic areas of maternal health, nephrology, and hematology/oncology, explains small-cap expert Jim Oberweis, Jr., editor of The Oberweis Report.

The lead drugs from AMAG Pharmaceuticals (AMAG) is Makena for the prevention of preterm birth, comprising roughly two-thirds of their total revenues, and Feraheme for iron replacement, comprising just under one-quarter of total revenues.

AMAG significantly expanded their business in November of 2014 with the $675 million acquisition of Lumara Health, whose flagship product was Makena.

Makena is the only drug approved by the FDA indicated to reduce the risk of preterm birth (estimated to occur in roughly 12% of all US pregnancies) in women who are considered at-risk.

Makena is currently available in 5ml vials, though, in October 2014, the company filed a prior approval supplement to the original Makena New Drug Application, seeking approval of a 1ml preservative-free vial of Makena.

The company believes that the availability of Makena in 1ml vials would allow AMAG to capture further market share.

AMAG has orphan drug exclusivity until 2018 and is currently seeking to expand Makena's formulations and drug delivery technologies as part of the product's lifecycle management program.

The company met with the FDA in January of 2015 seeking regulatory advice on such projects.

Feraheme was approved for marketing in the US in June 2009 by the FDA for use as an IV iron replacement therapy for the treatment of iron deficiency anemia (IDA) in adult patients with chronic kidney disease (CKD).

Sales of Feraheme increased 23% in the latest reported quarter from a combination of price and volume increases year over year. In the company's latest reported first quarter, sales increased over 300% to $89.5 million from $20.8 million in the first quarter of last year.

AMAG Pharmaceuticals reported earnings per share of $1.17 in the latest reported first quarter versus a loss in the same quarter of last year.

Clients of Oberweis Asset Management own approximately 10,000 shares. These shares may be appropriate for risk-oriented investors.

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