Amag Pharmaceuticals is buying the maternal health business of Lumara Health to get access to the big-selling premature birth drug Makena.

The company is forking out $675 million ($600 million in cash and $75 million in stock) and additional contingent consideration of up to $350 million based on certain sales milestones for the business. The latter is dominated by Makena (hydroxyprogesterone caproate) injection, the only US Food and Drug Administration-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.

Sales of Makena over the 12 months ending August 31, topped $130 million, a 72% increase compared to the prior year period. Amag believes that “positive market dynamics, including a favourable regulatory environment, and implementation of a new patient-centric business strategy” have contributed to the growth of Makena.

Chief executive William Heiden said the drug will be a tremendous addition to our portfolio and will be complementary to Amag’s in-office injectables commercial expertise. He also feels the deal represents “an excellent strategic fit with our Feraheme ((ferumoxytol) market expansion plans”.

Fit with Feraheme

Earlier this year, the FDA rejected Amag’s supplemental New Drug Application to expand use of Feraheme (ferumoxytol) beyond the current chronic kidney disease indication to include all adult iron deficiency anaemia patients who have failed or cannot tolerate oral iron treatment. If it succeeds in expanding the label, Amag thinks the acquired commercial sales force from Lumara (which emerged in May from bankrupt K-V Pharmaceuticals) will help grow Feraheme.

Makena was approved in February 2011 but the move caused uproar. At the time, K-V planned to charge $1,500 per dose (but reduced it a couple of months later to $690 per injection), although a generic version had been available through compounding pharmacies for many years for just $10-$20.

KV sent letters to pharmacies that compound hydroxyprogesterone that they should desist or face the wrath of the FDA but the agency said it would not take action and K-V entered Chapter 11 bankruptcy protection.

The deal excludes a portfolio of women's health products, which Lumara is selling to Perrigo for $82 million in cash.