AMAG Chief Leaves as Company Reviews Options Including Sale
AMAG Pharmaceuticals Inc. (AMAG), maker of the anemia drug Feraheme, said its chief executive officer resigned and 25 percent of its workers will be fired as the company reviews options that may include a possible sale.
There has been “some expression of interest” since AMAG’s plan to buy Allos Therapeutics Inc. (ALTH) failed last month, interim CEO Frank Thomas said on a conference call today. Thomas will head the Lexington, Massachusetts-based company while AMAG seeks a permanent successor to departing CEO Brian Pereira. The shares rose the most in 22 months.
AMAG said Oct. 21 it didn’t get enough votes from investors to support a planned acquisition of Westminster, Colorado-based Allos, a deal valued at the time at $184.8 million. The purchase was opposed by investors including hedge fund MSMB Capital Management, whose chief investment officer, Martin Shkreli, called for management changes and job cuts at AMAG.
“We are committed to expeditiously evaluating all available options to enhance stockholder value, and the restructuring announced today is an important first step in that process,” said Michael Narachi, chairman of AMAG’s board, in a statement today.
AMAG had 226 employees as of Feb. 16, according to a regulatory filing. Pereira also will leave his post on the board, while continuing to advise on matters including clinical development, the company said.
Chief Commercial Officer Gary Zieziula also left the company. Thomas, the company’s chief financial officer, replaced Zieziula as well as taking the interim CEO position.
AMAG gained 18 percent to $16.20 at 4 p.m. New York time, for the biggest gain since January 2010. The shares are down 10 percent this year.
“We’re evaluating all strategic alternatives available,” Thomas said on the conference call. “This includes a possible sale, merger, acquisition or in-licensing opportunity.”
Since the Allos deal, “there has been some expression of interest, which we intend to quickly review with our board,” he said.
AMAG said the restructuring plan will reduce operating expenses by $20 million to $25 million next year. The company sees $3.2 million in charges related to the overhaul, to be recorded in the fourth quarter of this year.
MSMB, which owned 5.9 percent of AMAG as of Oct. 7, had made an unsolicited bid to buy the company in August for $18 a share, or $378 million. Shkreli said Oct. 21 the plan still stood. The hedge fund is seeking to replace AMAG’s board, adding two new proposed directors to its slate earlier this week.
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