By Manas Mishra
(Reuters) – Amag Pharmaceuticals Inc said on Thursday chief executive officer would step down and it plans to divest two of its women’s health drugs, bowing to pressure from investor Caligan Partners that has long urged it to hive off the slow-growing unit.
Amag said it would sell its recently approved female libido treatment, Vyleesi, and Intrarosa, a treatment for pain in post-menopausal women, and that it has received preliminary interest in buying or sub-licensing the rights to the drugs.
CEO William Heiden has decided to step down, but would continue in his role as CEO and president until his successor is appointed, the company said.
The divestiture plans mark a shift in direction for Amag, which reported a 31% fall in total sales in the third quarter, from commercialized treatments to largely developing experimental treatments.
The drugmaker in June won U.S. approval for Vyleesi, the only injectable drug on the market for hypoactive sexual desire disorder, yet two months later lowered its full-year revenue expectations, hurt by dismal sales in its women’s health unit.
Its other women’s health product, Makena, a hormonal injection for reducing the risk of pre-term birth, is currently on the market, but a panel of experts to the U.S. Food and Drugs Administration in October voted to withdraw the drug.
“The uncertainty around the long-term durability of Makena revenues makes it challenging to invest in both our promising pipeline and in the physician and consumer marketing required to support these two … products,” Heiden said in a statement.
Caligan had been pressing for changes at the company, including separating its women’s health unit from its treatments for other disorders, and scored a win in October after Amag hired two directors proposed by the hedge fund.
Amag would keep its anemia treatment, Feraheme, the only approved drug outside the women’s health unit. Feraheme brought in sales of $44.2 million in the third quarter, the most among all its products.
The company has engaged Goldman Sachs and Co. as its financial adviser.
Shares of the company fell 2.5% to $12.35 after it also forecast full-year 2020 sales of between $230 million and $280 million, falling short of Refinitiv IBES estimates of $343.7 million.
(This story Corrects estimates in paragraph 11 to $343.7 million from $327.4 million)
(Reporting by Manas Mishra and Trisha Roy in Bengaluru; Editing by Shinjini Ganguli)