AMAG Pharmaceuticals Realigns Operating Cost Structure; Expects to Reduce Workforce by 45 Position by the end of 2012
AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG) today announced a number of changes to its operating expenses that further align its cost structure with the company's focus on advancing Feraheme® and expanding its product portfolio with commercial stage assets. First, AMAG is moving to an outsourced manufacturing model and intends to divest the company's manufacturing facility in Cambridge, MA. Additionally, the company's global phase III broad iron deficiency anemia (IDA) clinical program for Feraheme, which will support an sNDA filing later this year, will conclude this year. Along with the natural attrition of external development costs associated with the conclusion of the IDA development program, AMAG is reducing internal development expenses to match the reduced activities at this time, and will continue to adapt development resources to meet the company's future development needs.
By year-end 2012, AMAG expects to reduce its workforce by approximately 45 positions, the majority of which are expected to be associated with the company's manufacturing and development infrastructure. Some of the eliminated positions are budgeted, open positions that the company will not fill. The company expects to incur approximately $1.0 million in charges associated with the restructuring, which will be spread over the remainder of 2012, with $0.5 million expected to be recognized in the second quarter of 2012.
With the intended divestiture of the company's manufacturing facility, AMAG will stop producing GastroMark and has entered into agreements with the commercial parties that sell GastroMark in the US and EU. AMAG will incur one-time costs associated with the GastroMark agreements of $1.6 million in the second quarter of 2012. The company expects to sell its Cambridge, MA manufacturing facility, which AMAG owns outright.
The changes implemented in 2012, will result in reduced employee-related operating expenses beginning in 2013. In addition, external research and development expenses associated with the company's broad IDA clinical development program planned for 2012 will not recur, leading to further reductions in the company's 2013 operating expenses. The full impact of these reductions will be communicated when the company issues its 2013 financial guidance, later this year.
The expected change in manufacturing supply chain strategy for the company will lower the costs associated with the manufacture of Feraheme. The company expects that these changes will result in lower costs of goods sold beginning in 2014. The company may provide updated 2012 financial guidance when it reports second quarter financial results.
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