Dive Brief:
- AMAG Pharmaceuticals will sell Cord Blood Registry in a restructuring, bringing its focus more squarely onto pharmaceuticals. Private equity investment firm GI Partners will pick up the stem cell collection and storage company for $530 million in an all-cash sale.
- In the first quarter of 2018, AMAG posted an operating loss of $44.9 million, compared with a $40 million loss in the same quarter the previous year.
- The Waltham-Massachusetts-based business intends to use most of the deal proceeds to pay off the remaining $475 million of principal of its 7.875% senior notes due 2023. Its board of directors unanimously approved the transaction, expected to close in the third quarter on 2018.
Dive Insight:
AMAG has had a busy first half of 2018. In February, the Food and Drug Administration approved the company's supplemental new drug application to broaden the label for Feraheme (ferumoxytol injection) to all adult iron deficiency anemia patients with intolerance to or inadequate response to oral iron, and the drug has now been launched for its new broader indication. The same month, the FDA also approved a second-generation subcutaneous version of Makena, a hydroxyprogesterone caproate auto-injector to reduce the risk of preterm birth. This product was launched in 2018.
In March, AMAG submitted an NDA to the FDA for bremelanotide to treat acquired, generalized hypoactive sexual desire disorder in premenopausal women. The application was accepted earlier this month.
The company said this spate of news is the driver behind the sell-off of the stem cell banking company Cord Blood Registry, and in its company update in February 2018, CEO William Heiden said AMAG has been evolving into a more fully integrated pharmaceutical company with strong development capabilities.
"The divestiture of CBR is an important step as we execute on AMAG’s strategic plan, which includes leveraging our proven expertise in drug development and commercialization to bring innovative products to patients with unmet medical needs," said Heiden in a statement on the divestiture. "The transaction allows us to focus squarely on investing in and growing AMAG’s current pharmaceutical products, as well as continuing to expand the portfolio through additional product acquisitions or licenses."
AMAG bought CBR, then the world's largest stem cell collection and storage company, in mid-2015 for $700 million. It has made somewhat of a loss, selling the company for $530 million in 2018. The money will pay off debt.
"We believe eliminating the high-yield bonds from our capital structure will align our balance sheet with our long-term growth plans and our renewed focus on growing and further diversifying our pharmaceutical business" said Ted Myles, AMAG’s chief financial officer, in a statement.