(GLOBE NEWSWIRE) – AMAG Pharmaceuticals, Inc. (Nasdaq:AMAG) today announced that it has entered into a definitive agreement to acquire Lumara Health Inc., a privately-held pharmaceutical company specializing in women’s health, for $675 million ($600 million in cash and $75 million in stock) and additional contingent consideration of up to $350 million based on achievement of certain sales milestones. Lumara Health also announced today that the company signed a separate agreement to divest certain other assets to a third party.
Lumara Health markets the fast-growing product Makena® (hydroxyprogesterone caproate injection), which was granted 7-year orphan drug exclusivity in February 2011 and is the only U.S. Food and Drug Administration (FDA)-approved product indicated to reduce the risk of preterm birth in women who are pregnant with one baby and who have delivered one preterm baby spontaneously in the past. Preterm birth is defined as the delivery of a baby at less than 37 weeks of pregnancy. Approximately one in every nine babies is born preterm, or 11.7 percent of births in the United States. Premature birth in the U.S. costs $26.2 billion annually, and average first-year medical costs are approximately 10 times greater for preterm infants than for full-term infants.
“This is a truly transformative transaction that will propel AMAG into a profitable, high-growth multi-product specialty pharmaceutical company positioned for what we expect to be continued revenue and bottom-line growth, further business diversification and shareholder value creation,” said William Heiden, president and chief executive officer of AMAG. “We believe the Lumara Health transaction will facilitate future product acquisitions in an attractive new therapeutic area and is an excellent strategic fit with our Feraheme market expansion plans.”
Net sales of Makena over the 12 months ending August 31, 2014 were greater than $130 million, a 72% increase compared to the prior year period. In addition, based on the three months ended August 31, 2014, Makena and Lumara Health’s maternal health business would be on pace to exceed annualized net sales of $180 million and EBITDA of $110 million. AMAG believes that positive market dynamics, including a favorable regulatory environment, and implementation of a new patient-centric business strategy contributed to the significant recent growth of Makena.
Mr. Heiden continued, “Makena is a unique product with clear clinical benefits that serves an important medical need for at-risk pregnant mothers and their unborn children. The consequences of preterm birth are a significant public health issue, and we believe that Makena will be a tremendous addition to our portfolio and will be complementary to AMAG’s in-office injectables commercial expertise. We’re also looking forward to welcoming to AMAG the talented Makena commercial team, which has put Makena on a remarkably strong sales growth trajectory. We believe that our combined larger scale, combined portfolio diversification, new resources and broader commercial expertise will allow AMAG to create new long-term growth opportunities and allow us to better serve patients.”
“I strongly believe AMAG is the right partner to support the continued growth of Makena and our maternal health business,” said Greg Divis, chief executive officer of Lumara Health. “This transaction is a great reflection of the outstanding work our team has done to build the maternal health franchise to what it is today, and I am pleased that this same team will continue to grow the brand within AMAG. It has been clear from the start of our discussions that AMAG shares our commitment to at-risk pregnant mothers, their babies and their healthcare providers.”