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In response to the company reporting mixed top-line results from a clinical trial, shares of AMAG Pharmaceuticals(NASDAQ: AMAG),abiopharmaceuticalcompany primarily focused on maternal health, fell by as much as 14% in early morning trading on Thursday.
AMAG announced top-line results from a pharmacokinetic study on Thursday. This trial was designed to compare bioavailability data of a subcutaneous version of Makena -- the company's drug that reduces the risk ofpreterm birth in certain populations of pregnant women --when compared to its currently availableintramuscular injection.Results from the study showed thatthe subcutaneous version of Makena demonstrated bioequivalence when measured using anarea under the curve (AUC) test. At the 90% confidence interval, the ratio for AUC came in at 105.2% to 124.4%, which falls within the Food and Drug Administration's bioequivalencerange of 80% to 125%.
That's the good news.
However, thepeak plasma (Cmax) concentration for the subcutaneous version of Makena was slightly higher than for theintramuscular injecting, coming in at7.3 ng/mL versus 6.3 ng/mL. At the 90% confidence interval, the ratio of Cmax came in at 96.6% to 138.7%. That falls slightlyoutsidethe FDA's bioequivalence range.
That Cmax miss doesn't appear to bother AMAG Cheif Medical Officer Dr. Julie Krop, though she stated that "the results from this definitive PK study have demonstrated comparable bioavailability between the subcutaneous and intramuscular injections of Makena, and we are pleased to have met our primary study objective of demonstrating bioequivalence on the measure of AUC."
Dr. Krop later added that the company plans to submit a supplemental new drug application to the FDA in the second quarter of this year. If all goes well, the company should have an approval decision in hand by the fourth quarter.
At least one analyst doesn't appear to share her confidence. Brandon Folkes, an analyst at Guggenheim, lowered his price target on AMAG's stock today to $28 in response the results.
The less-than-stellar clinical data mixed with the price target revision appear to be the reasons behind Thursday's drubbing.
While AMAG's management team is confident that the subcutaneous version of Makena will go on to win FDA approval, it is hard to handicap the company's actual chances of success. Regulatory success is certainly important to its future as Makena is the company's most important product and is slated to lose patent protection in 2018.
Trading for less than four times forward earnings, AMAG's stock continues to look cheap. However, the company's bloated balance sheet continues to give me pause, so I don't think this drop is a buying opportunity.
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