AMAG Pharmaceuticals Reports Financial Results for Third Quarter and Nine Months Ended September 30, 2014

AMAG Pharmaceuticals Reports Financial Results for Third Quarter and Nine Months Ended September 30, 2014

 20% Growth Results in Record U.S. Feraheme Sales Lumara Health Acquisition on Track to Close in Fourth Quarter

WALTHAM, Mass., Oct. 30, 2014 (GLOBE NEWSWIRE) -- AMAG Pharmaceuticals,
Inc. (Nasdaq:AMAG), a specialty pharmaceutical company, today reported
unaudited consolidated financial results for the third quarter and nine
months ended September 30, 2014. Total revenues for the third quarter
of 2014 were $25.5 million, of which $22.5 million were U.S. net
Feraheme(R) (ferumoxytol) product sales, the highest Feraheme quarterly
sales since launch in 2009. AMAG ended the third quarter with $386.2
million in cash and investments.

"Our ability to deliver another quarter of record sales in the fifth
year since Feraheme's launch demonstrates that more physicians across
the U.S. are prescribing Feraheme for the treatment of iron deficiency
anemia (IDA) in a growing number of patients with chronic kidney
disease (CKD)," said William Heiden, president and chief executive
officer. "In addition to driving growth of Feraheme, we also are
executing on our long-term strategic plan to expand and diversify our
product portfolio through our recently announced agreement to acquire
Lumara Health Inc. We believe the Lumara Health business will
facilitate future product acquisitions in an attractive new therapeutic
area and is an excellent strategic fit with our Feraheme market
expansion plans, if regulatory approval for the broader IDA indication
is sought and received."

Business Highlights


  -- The company reported record U.S. net Feraheme product sales of $22.5
     million in the third quarter of 2014, compared to $19.3 million in the
     third quarter of 2013, representing a 20% increase (excluding a $0.6
     million reduction in reserves for Medicaid rebates recorded in the third
     quarter of 2013). This growth was driven by higher volume and improved
     net revenue per gram of Feraheme, each up 10% from the third quarter of
     2013.
  -- Total Feraheme provider demand for the third quarter of 2014 was
     approximately 37,000 grams, compared to approximately 36,000 in the third
     quarter of 2013.1 Several strategies led to the sales success during the
     third quarter of 2014, including greater penetration in the hospital
     segment and effective commercial contracting strategies.
  -- Feraheme gross margins held relatively steady at 88% in the third quarter
     of 2014, compared to 87% in the third quarter of 2013. Reported operating
     expenses for the third quarter of 2014 were $18.2 million. Excluding the
     favorable impact of a $3.7 million adjustment to MuGard-related
     contingent consideration expense in the quarter, operating expenses were
     $21.9 million, representing a 13% increase from the corresponding period
     in 2013 and a 5% increase from the second quarter of 2014. The increase
     in operating expenses is due largely to costs associated with the planned
     acquisition of Lumara Health.
  -- On September 29, 2014, AMAG announced that it had entered into a
     definitive agreement to acquire Lumara Health Inc., a privately held
     pharmaceutical company specializing in women's health. Lumara Health
     markets the fast-growing product Makena(R) (hydroxyprogesterone caproate
     injection), which was granted 7-year orphan drug exclusivity in February
     2011 and is the only FDA-approved product indicated to reduce the risk of
     preterm birth in women who are pregnant with one baby and who have
     spontaneously delivered one baby preterm in the past.
     -- AMAG will acquire Lumara Health for $675 million ($600 million in cash
        and $75 million in AMAG stock) and additional contingent consideration
        of up to $350 million based on achievement of certain sales
        milestones, including $100 million payments at $300 million, $400
        million and $500 million in net sales in non-overlapping 12-month
        periods.
     -- Based on the last three months ended August 31, 2014, the combined pro
        forma company (AMAG and Lumara Health) is on a run rate to achieve
        annualized total revenue of approximately $288 million and annualized
        pro forma adjusted EBITDA of approximately $147 million2, including
        $20 million in expected annual synergies.
     -- Shipments of Makena for the third quarter were 20,421 vials,
        representing 14% growth over the quarter ended June 30, 2014. AMAG
        believes that attractive market dynamics, along with the
        implementation of a new patient-centric business strategy aimed at
        expanding patient access to and compliance with the product, has
        contributed to the significant recent growth of Makena.


"AMAG's acquisition of Lumara Health will position the combined company
for accelerated top-line growth and significant cash earnings, provide
further business diversification and create value for our
shareholders," said Frank Thomas, executive vice president and chief
operating officer. "Plans for integrating these two businesses are well
underway, and we believe they will allow us to efficiently and quickly
capture value following the close of the acquisition. We also feel
confident that we are on track to complete the loan syndication process
and close the transaction by the end of the year."

Third Quarter and Nine Month 2014 Financial Results (unaudited)

The company reported record U.S. net Feraheme product sales of $22.5
million for the third quarter of 2014, compared to $19.3 million in the
third quarter of 2013. For the nine months ended September 30, 2014,
AMAG reported U.S. net Feraheme product sales of $62.1 million,
compared to $52.4 million for the corresponding period in 2013.

Total revenues for the quarter ended September 30, 2014 were $25.5
million, as compared to $21.6 million for the third quarter of 2013.
For the nine months ended September 30, 2014, AMAG reported total
revenues of $71.1 million, as compared to revenues of $59.1 million for
the corresponding period in 2013.

Feraheme cost of goods sold (COGS) for the quarter ended September 30,
2014 were $2.8 million, or 12% of net Feraheme product sales, compared
to $2.5 million, or 13% of net Feraheme product sales for the quarter
ended September 30, 2013. For the nine months ended September 30, 2014,
Feraheme COGS were $8.2 million, or 13% of net Feraheme product sales,
compared to $8.4 million, or 16% of net Feraheme product sales, for the
corresponding period in 2013.

Total operating expenses for the quarter ended September 30, 2014 were
$18.2 million, compared to $19.5 million for the third quarter of 2013.
Total operating expenses for the nine months ended September 30, 2014
were $63.0 million, as compared to operating expenses of $58.1 million
for the corresponding period in 2013.

The company reported net income of $1.5 million, or $0.07 per basic
share, and $0.06 per diluted share, for the quarter ended September 30,
2014, as compared to net loss of $0.1 million, or $0.01 per basic and
diluted share, for the third quarter of 2013. AMAG reported a net loss
for the nine months ended September 30, 2014 of $7.2 million, or $0.33
per basic and diluted share, as compared to a net loss of $5.9 million,
or $0.28 per basic and diluted share, for the corresponding period in
2013.

As of September 30, 2014, the company's cash and investments totaled
approximately $386.2 million, reflecting net cash usage during the
third quarter of approximately $0.3 million. The Company expects to
have approximately $100 million in cash and investments following the
close of the Lumara Health transaction.

Conference Call and Webcast Access

AMAG Pharmaceuticals, Inc. will host a conference call and webcast with
slides today at 8:00 a.m. EDT, during which management will discuss the
company's financial results, the acquisition of Lumara Health and
commercial progress. To access the conference call via telephone,
please dial (877) 412-6083 from the United States or (702) 495-1202 for
international access. A telephone replay will be available from
approximately 11:00 a.m. ET on October 30, 2014 through midnight
November 6, 2014. To access a replay of the conference call, dial (855)
859-2056 from the United States or (404) 537-3406 for international
access. The pass code for the live call and the replay is 25342306.

The call will be webcast with slides and accessible through the
Investors section of the company's website at www.amagpharma.com. The
webcast replay will be available from approximately 11:00 a.m. ET on
October 30, 2014 through midnight on November 29, 2014.

About AMAG

AMAG Pharmaceuticals, Inc. is a specialty pharmaceutical company that
markets Feraheme(R) (ferumoxytol) Injection and MuGard(R) Mucoadhesive
Oral Wound Rinse in the United States. Along with driving continued
growth of its products, AMAG intends to continue to expand its
portfolio through the in-license or purchase of additional
pharmaceutical products or companies, including revenue-generating
commercial products and late-stage development assets that leverage its
corporate infrastructure, sales force call points and commercial
expertise. Our primary goal is to bring to market therapies that
provide clear benefits and improve patients' lives. For additional
company information, please visit www.amagpharma.com.

About Lumara Health

Lumara Health(TM) is a specialty pharmaceutical company committed to
advancing the health of women throughout the stages of their lives,
with a particular focus on maternal health. At the heart of Lumara
Health is our mission to help women achieve healthier lives. For more
information on Lumara Health, please visit www.lumarahealth.com.

About Makena(R) (hydroxyprogesterone caproate injection)

Makena(R) is a progestin indicated to reduce the risk of preterm birth
in women with a singleton pregnancy who have a history of singleton
spontaneous preterm birth.

The effectiveness of Makena is based on improvement in the proportion
of women who delivered <37 weeks of gestation. There are no
controlled trials demonstrating a direct clinical benefit, such as
improvement in neonatal mortality and morbidity.

Limitation of use: While there are many risk factors for preterm birth,
safety and efficacy of Makena has been demonstrated only in women with
a prior spontaneous singleton preterm birth. It is not intended for use
in women with multiple gestations or other risk factors for preterm
birth.

Makena should not be used in women with any of the following
conditions: blood clots or other blood clotting problems, breast cancer
or other hormone-sensitive cancers, or history of these conditions;
unusual vaginal bleeding not related to the current pregnancy,
yellowing of the skin due to liver problems during pregnancy, liver
problems, including liver tumors, or uncontrolled high blood pressure.

Before patients receive Makena, they should tell their healthcare
provider if they have an allergy to hydroxyprogesterone caproate,
castor oil, or any of the other ingredients in Makena; diabetes or
prediabetes, epilepsy, migraine headaches, asthma, heart problems,
kidney problems, depression, or high blood pressure.

In one clinical study, certain complications or events associated with
pregnancy occurred more often in women who received Makena. These
included miscarriage (pregnancy loss before 20 weeks of pregnancy),
stillbirth (fetal death occurring during or after the 20th week of
pregnancy), hospital admission for preterm labor, preeclampsia (high
blood pressure and too much protein in the urine), gestational
hypertension (high blood pressure caused by pregnancy), gestational
diabetes, and oligohydramnios (low amniotic fluid levels).

Makena may cause serious side effects including blood clots, allergic
reactions, depression, and yellowing of the skin and the whites of the
eyes. The most common side effects of Makena include injection site
reactions (pain, swelling, itching, bruising, or a hard bump), hives,
itching, nausea, and diarrhea.

For additional U.S. product information, including full prescribing
information, please visit www.makena.com.

About Feraheme(R) (ferumoxytol)/Rienso

Feraheme (ferumoxytol) Injection for IV use received marketing approval
from the FDA on June 30, 2009 for the treatment of IDA in adult chronic
kidney disease (CKD) patients and was commercially launched by AMAG in
the U.S. shortly thereafter. Ferumoxytol is protected in the U.S. by
five issued patents covering the composition and dosage form of the
product. Each issued patent is listed in the FDA's Orange Book, the
last of which expires in June 2023.

Ferumoxytol received marketing approval in Canada in December 2012,
where it is marketed by Takeda as Feraheme, and in the European Union
in June 2013 where it is marketed by Takeda as Rienso(TM). Ferumoxytol
received marketing approval in Switzerland in August 2013.

Feraheme is contraindicated in patients with known hypersensitivity to
Feraheme or any of its components. Serious hypersensitivity reactions,
including anaphylactic-type reactions, some of which have
life-threatening and fatal, have been reported in patients receiving
Feraheme. Serious adverse reactions of clinically significant
hypotension have been reported in the post-marketing experience of
Feraheme.

For additional U.S. product information, including full prescribing
information, please visit www.feraheme.com.

About MuGard

MuGard(R) Mucoadhesive Oral Wound Rinse is indicated for the management
of oral mucositis/stomatitis (that may be caused by radiotherapy and/or
chemotherapy) and all types of oral wounds (mouth sores and injuries),
including aphthous ulcers/canker sores and traumatic ulcers, such as
those caused by oral surgery or ill-fitting dentures or braces. MuGard
is contraindicated in patients with known hypersensitivity to any of
the ingredients in the formulation. MuGard was launched in 2010 after
receiving 510(k) clearance from the U.S. Food and Drug Administration.

Forward-looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA)
and other federal securities laws. Any statements contained herein
which do not describe historical facts, including but not limited to,
statements regarding: (i) physician behaviors and growth in the number
of patients with CKD; (ii) AMAG's plans to build a multi-product
specialty pharmaceutical company; (iii) the transaction with Lumara
Health and the addition of Makena to AMAG's product portfolio,
including expected benefits and the impact on shareholder value and
AMAG's business diversification, as well as the timing of the closing
of the transaction with Lumara Health; (iv) AMAG's belief that the
Lumara Health business will facilitate future product acquisitions and
its strategic fit with AMAG's Feraheme market expansion plans, if
regulatory approval for the broader IDA indication is sought and
received; (v) AMAG's plans to expand the market for Feraheme; (vi)
expectations that the combined company, after the completion of AMAG's
acquisition of Lumara Health, will see annualized total revenue of
approximately $288 million, adjusted EBITDA of approximately $147
million and expected annual synergies of $20 million; (vii) beliefs and
expectations regarding integration efforts, (viii) beliefs regarding
the drivers of recent growth in sales of Makena; (ix) AMAG's belief
that this transaction will position AMAG for accelerated top-line
growth and significant cash earnings, further portfolio diversification
and shareholder value creation; (x) beliefs about the commercial
platform and the strategic fit of Lumara Health; (xi) expectations that
the combined company will generate cost synergies and other
efficiencies; and (xii) AMAG's beliefs regarding the timing of
completion and expected closing of the pending loan syndication process
in connection with the Lumara Health transaction are forward-looking
statements which involve risks and uncertainties that could cause
actual results to differ materially from those discussed in such
forward-looking statements. Statements about AMAG's or Lumara Health's
past financial results do not, and are not meant to, predict future
results. AMAG can provide no assurance that such results and
performance will continue.

Such risks and uncertainties include, among others: (1) the possibility
that the closing conditions set forth in the definitive agreement for
the acquisition of Lumara Health will not be met and that the parties
will be unable to consummate the proposed transaction, (2) the chance
that, despite having a commitment in place for the financing of the
Lumara Health acquisition, AMAG will be unable to secure such
financing, or financing on satisfactory terms, in amounts sufficient to
consummate the acquisition of Lumara Health, (3) the possibility that
if the Lumara Health acquisition is consummated, AMAG may not realize
the expected benefits, synergies and opportunities anticipated in
connection with the transaction, including the anticipated costs
synergies of $20 million, annualized sales of more than $180 million,
continued revenue growth, annualized EBITDA of $110 million and $1
billion market opportunity, (4) the challenges of integrating the
Makena commercial team into AMAG, (5) the impact on sales of Makena
from competitive, commercial payor, government (including federal and
state Medicaid reimbursement policies), physician, patient or public
responses with respect to product pricing, product access and sales and
marketing initiatives, (6) the impact of patient compliance on units
sales, (7) the uncertainty of achieving sales of Feraheme to OB/GYN
specialists for the treatment of women who suffer from IDA, even
assuming FDA approval for the broader IDA indication, (8) AMAG may face
challenges in leveraging its in-office injectables commercial
expertise, which could result in unforeseen expenses and disrupt
business operations, (9) liabilities AMAG assumes from Lumara Health,
including the class action litigation In Re K-V Pharmaceutical Company
Securities Litigation, Case No. 4:11CV1816 AGF, may be higher than
expected, (10) the possibility that sales of Makena will not meet
expectations as a result of current and future competition from
compounded products and/or future competition from generic alternatives
upon expiration of exclusivity in February 2018, (11) the impact of
reimbursement policies for Makena and the resulting coverage decisions
and/or impact on pricing, (12) the number of preterm birth risk
pregnancies for which Makena may be prescribed, its safety and side
effects profile and acceptance of pricing, (13) in connection with the
Lumara Health acquisition, AMAG will incur a substantial amount of
indebtedness and will have to comply with restrictive and affirmative
debt covenants, including a requirement that AMAG reduce its leverage
over time, (14) the possibility that AMAG will need to raise additional
capital from the sale of its common stock, which will cause significant
dilution to AMAG's stockholders, in order to satisfy its contractual
obligations, including its debt service, milestone payments that may
become payable to Lumara Health's stockholders and/or in order to
pursue business development activities, (15) upon consummation of the
Lumara Health transaction, AMAG will be highly leveraged and have
limited cash and cash equivalent resources which may limit its ability
to take advantage of attractive business development opportunities and
execute on its strategic plan, (16) the possibility that AMAG's
stockholders will not approve the amendment to its shareholder rights
plan and that AMAG's tax benefits, including those acquired upon
consummation of the Lumara Health acquisition, will not be available in
the future, (17) the likelihood and timing of potential approval of
Feraheme in the U.S. in the broader IDA indication in light of the
complete response letter AMAG received from the FDA informing AMAG that
its supplemental new drug application (sNDA) for the broader indication
could not be approved in its present form and stating that AMAG had not
provided sufficient information to permit labeling of Feraheme for safe
and effective use for the proposed broader indication, (18) the
possibility that following FDA review of post-marketing safety data,
including reports of serious anaphylaxis, cardiovascular events, and
death, and/or in light of the label changes requested by the European
Medicines Agency's (EMA) Pharmacovigilance Risk Assessment Committee
(PRAC) and confirmed by the Committee for Medicinal Products for Human
Use (CHMP), the FDA (or other regulators) will request additional
technical or scientific information, new studies or reanalysis of
existing data, on-label warnings, post-marketing
requirements/commitments or risk evaluation and mitigation strategies
(REMS) in the current indication for Feraheme for IDA in adult patients
with CKD and the additional costs and expenses that will or may be
incurred in connection with such activities, (19) whether AMAG's
proposed label changes will be acceptable to the FDA or other
regulatory authorities and what impact such changes, or such additional
changes as the FDA, CHMP or other regulators may require, will have on
sales of Feraheme/ Rienso(TM) (Rienso is the trade name for ferumoxytol
outside of the U.S. and Canada), (20) AMAG's and Takeda Pharmaceutical
Company Limited's ability to successfully compete in the IV iron
replacement market both in the U.S. and outside the U.S., including the
EU, as a result of limitations, restrictions or warnings in
Feraheme's/Rienso's current or future label, including that
Feraheme/Rienso be administered to patients by infusion over at least
15-minutes (replacing injection) and that it be contraindicated for
patients with any known history of drug allergy, (21) AMAG's ability to
execute on its long-term strategic plan or to realize the expected
results from its long-term strategic plan, (22) Takeda's ability to
obtain regulatory approval for Feraheme in Canada, and Rienso in the
EU, in the broader IDA patient population, (23) the possibility that
significant safety or drug interaction problems could arise with
respect to Feraheme/Rienso and in turn affect sales, or AMAG's ability
to market the product both in the U.S. and outside of the U.S.,
including the EU, (24) the relationship between Takeda and AMAG and the
impact on commercialization efforts for Feraheme/Rienso in the EU and
Canada, (25) the likelihood and timing of milestone payments, if any,
in connection with AMAG's licensing arrangement with Takeda, (26) the
manufacture of Feraheme/Rienso or MuGard (or Makena if the acquisition
is consummated), including any significant interruption in the supply
of raw materials or finished product, (27) AMAG's patents and
proprietary rights both in the U.S. and outside the U.S. (including
those that AMAG acquires from the acquisition of Lumara), (28) the risk
of an Abbreviated New Drug Application (ANDA) filing for generic
ferumoxytol, especially following the FDA's draft bioequivalence
recommendation for ferumoxytol published in December 2012 (or,
following the consummation of the Lumara Health acquisition,
hydroxyprogesterone caproate), (29) the possibility that AMAG (or
Takeda) will disseminate future Dear Healthcare Provider letters, (30)
uncertainties regarding AMAG's ability to compete in the oral mucositis
market in the U.S. and in the women's maternal health market and (31)
other risks identified in AMAG's filings with the U.S. Securities and
Exchange Commission (SEC), including its Quarterly Report on Form 10-Q
for the quarter ended June 30, 2014 and subsequent filings with the
SEC. Any of the above risks and uncertainties could materially and
adversely affect AMAG's results of operations, profitability and cash
flows, which would, in turn, have a significant and adverse impact on
AMAG's stock price. Use of the term "including" in the two paragraphs
above shall mean in each case "including, but not limited to." AMAG
cautions you not to place undue reliance on any forward-looking
statements, which speak only as of the date they are made.

AMAG disclaims any obligation to publicly update or revise any such
statements to reflect any change in expectations or in events,
conditions or circumstances on which any such statements may be based,
or that may affect the likelihood that actual results will differ from
those set forth in the forward-looking statements.

AMAG Pharmaceuticals and Feraheme are registered trademarks of AMAG
Pharmaceuticals, Inc. MuGard is a registered trademark of Access
Pharmaceuticals, Inc. Rienso is a registered trademark of Takeda
Pharmaceutical Company Limited. Lumara Health is a trademark of Lumara
Health Inc. Makena is a registered trademark of Lumara Health Inc.

1 IMS Health

2 The $147 million in annualized adjusted EBITDA is arrived at as
follows: (1) AMAG net loss for the three months ended August 2014 of
($0.4) million, plus $3.1 million of interest expense and amortization
of debt discount and deferred financing costs, plus $0.2 million in
depreciation and amortization, less $0.3 million in interest income,
plus $1.5 million in stock compensation expense, plus $0.4 million due
to a fair value adjustment in contingent consideration expense, plus
$0.6 million in other items; PLUS (2) Lumara Health net income for the
three months ended August 2014 of $7.7 million, plus $0.9 million of
interest expense and amortization of debt discount and deferred
financing costs, plus $14.9 million in depreciation and amortization,
plus $2.3 million in stock compensation expense, plus $0.6 million in
other items; PLUS (3) $20 million in expected annual synergies.


CONTACT: AMAG Pharmaceuticals, Inc. Contact
         Katie Payne, 617-498-3303
 

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