AMAG Pharmaceuticals, has completed the acquisition of Lumara Health Inc., a specialty pharmaceutical company with a particular focus on maternal health. The transaction was announced on September 29, 2014 and included upfront consideration of $600 million in cash and 3,209,971 shares of AMAG common stock, and additional contingent consideration of up to $350 million based on the achievement of sales milestones.
Lumara Health is the exclusive marketer of Makena (hydroxyprogesterone caproate injection), the only US Food and Drug Administration (US 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. Lumara Health is committed to contributing to the fight against prematurity in a meaningful way. The company's focus includes helping to ensure that cost is not a barrier for patients. Its customer support center, the Makena Care Connection, has helped tens of thousands of women in the past year alone, providing insurance benefits and financial assistance, including assistance with commercial insurance copayments and providing the drug at no cost to eligible uninsured women.
"I am looking forward to building on the progress that Lumara Health has made and is making to reduce preterm birth. The emotional and economic toll of preterm births is enormous, and we'll continue to work hard to ensure that every at-risk mother has access to Makena therapy," said William Heiden, president and chief executive officer of AMAG. "I believe that this acquisition also provides a significant opportunity for us to strengthen Lumara Health's patient-centric model with additional products and services, and through even stronger collaboration with healthcare providers and the broader maternal health community."
Lumara Health executive Ken Wilson will lead the new maternal health division within AMAG and will report to Mr. Heiden.
"Becoming a part of AMAG provides the ideal environment for us to strengthen our fight against preterm birth," said Ken Wilson, who will be president of AMAG's Lumara Health maternal health division. "Bill Heiden has challenged the Lumara Health team to find innovative ways to help mothers at risk for preterm birth and to enhance our collaborative efforts with the maternal health community."
Wilson brings over 25 years of experience in the healthcare industry and, specifically, in the women's health space. Prior to joining Lumara Health as executive vice president of the company's maternal health division, Mr. Wilson held various leadership roles at Alere Health, Inc. (formerly Matria Healthcare), and has many accomplishments in women's health, including physician practice enhancement programs, maternity and neonatal intensive-care unit (NICU) care management solutions for both Medicaid and commercial health plans, as well as pediatric experience for medically fragile children. Mr. Wilson also has experience in planning, directing, and developing marketing, sales, and managed care strategies.
In connection with the completion of this transaction, AMAG has closed on a $340 million term loan, which will be used to fund part of the cash consideration for the acquisition of Lumara Health. The facility has a six-year term, except that the term loans will mature on September 30, 2018 if (a) more than $25 million in aggregate principal amount of AMAG's 2.50 per cent Convertible Senior Notes due 2019 remain outstanding (and are not converted to common stock or refinanced and replaced with debt that matures following, and has no amortization prior to, the date that is six and one half years following the closing of the transaction), and (b) the aggregate principal amount of all term loans, including all undrawn incremental commitments, is greater than $50 million on and as of such date. The facility bears interest at LIBOR plus 6.25 per cent and is subject to a LIBOR floor of 1 per cent.
Following the transaction, AMAG expects to have $100 million in cash and investments.
"The acquisition of Lumara Health accelerates AMAG's transformation into a profitable specialty biopharmaceutical company and provides a strong operating and financial platform for future growth. Our integration plans are well underway, and we are already hard at work preparing to issue our combined 2015 financial guidance in early January," said Frank Thomas, executive vice president and chief operating officer at AMAG.
Prior to AMAG's acquisition of Lumara Health, Lumara Health completed its previously announced disposition of a portfolio of women's healthcare products to a third party, including through licenses and sublicenses of certain intellectual property rights associated with those products.
AMAG has authorised inducement equity awards to 109 employees of Lumara Health who are becoming employees of AMAG. The inducement awards cover an aggregate of up to 369,200 shares of AMAG common stock in the form of options to purchase shares of AMAG common stock and/or restricted stock units (RSUs), and are being made as a material inducement to individuals entering into employment with AMAG in connection with the acquisition transaction. These awards are subject to each individual's commencement of employment. The exercise price of the options will be equal to the closing price of AMAG's common stock on the grant date and will be exercisable in four equal annual installments beginning on the first anniversary of the grant date. The options will have a ten-year term and will be subject to the terms and conditions of the stock option agreements pursuant to which the options will be granted. The RSUs will vest in four equal annual installments beginning on the first anniversary of the grant date and will be subject to the RSU agreements pursuant to which the RSUs will be granted. AMAG has issued these awards outside of its shareholder-approved equity plan in accordance with NASDAQ Listing Rule 5635(c).
Makena is a progestin indicated to reduce the risk of preterm birth in women with a singleton pregnancy who have a history of singleton spontaneous preterm birth.
The effectiveness of Makena is based on improvement in the proportion of women who delivered <37 weeks of gestation. There are no controlled trials demonstrating a direct clinical benefit, such as improvement in neonatal mortality and morbidity.
Limitation of use: While there are many risk factors for preterm birth, safety and efficacy of Makena has been demonstrated only in women with a prior spontaneous singleton preterm birth. It is not intended for use in women with multiple gestations or other risk factors for preterm birth.
Makena should not be used in women with any of the following conditions: blood clots or other blood clotting problems, breast cancer or other hormone-sensitive cancers, or history of these conditions; unusual vaginal bleeding not related to the current pregnancy, yellowing of the skin due to liver problems during pregnancy, liver problems, including liver tumours, or uncontrolled high blood pressure.
Before patients receive Makena, they should tell their healthcare provider if they have an allergy to hydroxyprogesterone caproate, castor oil, or any of the other ingredients in Makena; diabetes or prediabetes, epilepsy, migraine headaches, asthma, heart problems, kidney problems, depression, or high blood pressure.
In one clinical study, certain complications or events associated with pregnancy occurred more often in women who received Makena. These included miscarriage (pregnancy loss before 20 weeks of pregnancy), stillbirth (fetal death occurring during or after the 20th week of pregnancy), hospital admission for preterm labor, preeclampsia (high blood pressure and too much protein in the urine), gestational hypertension (high blood pressure caused by pregnancy), gestational diabetes, and oligohydramnios (low amniotic fluid levels).
Makena may cause serious side effects including blood clots, allergic reactions, depression, and yellowing of the skin and the whites of the eyes. The most common side effects of Makena include injection site reactions (pain, swelling, itching, bruising, or a hard bump), hives, itching, nausea, and diarrhoea.
Lumara Health, a division of AMAG Pharmaceuticals, Inc., is dedicated to advancing women's health. Lumara Health actively collaborates with leading researchers and physicians in the maternal health space. At the heart of Lumara Health is an unwavering dedication to serving patients.