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Edited Transcript of AMAG earnings conference call or presentation 1-Nov-19 12:00pm GMT

Q3 2019 AMAG Pharmaceuticals Inc Earnings Call

LEXINGTON Nov 5, 2019 (Thomson StreetEvents) -- Edited Transcript of AMAG Pharmaceuticals Inc earnings conference call or presentation Friday, November 1, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Anthony Casciano

AMAG Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer

* Edward H. Myles

AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer

* Julie Krop

AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer

* Linda S. Lennox

AMAG Pharmaceuticals, Inc. - VP of IR & Corporate Communications

* William K. Heiden

AMAG Pharmaceuticals, Inc. - CEO, President & Director

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Conference Call Participants

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* Ami Fadia

SVB Leerink LLC, Research Division - MD of Biopharma & Generics and Senior Analyst

* Balaji V. Prasad

Barclays Bank PLC, Research Division - Director

* Christopher Joseph Raymond

Piper Jaffray Companies, Research Division - MD & Senior Research Analyst

* Douglas Dylan Tsao

H.C. Wainwright & Co, LLC, Research Division - MD & Senior Healthcare Analyst

* Eun Kyung Yang

Jefferies LLC, Research Division - MD & Senior Equity Research Analyst

* Gregory B. Gilbert

SunTrust Robinson Humphrey, Inc., Research Division - Analyst

* Jessica Macomber Fye

JP Morgan Chase & Co, Research Division - Analyst

* Serge D. Belanger

Needham & Company, LLC, Research Division - Senior Analyst

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Presentation

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Operator [1]

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Good morning. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the AMAG Pharmaceuticals Third Quarter 2019 Earnings Call. (Operator Instructions) It is now my pleasure to turn today's call over to Ms. Linda Lennox, Vice President, Investor Relations. You may begin your conference.

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Linda S. Lennox, AMAG Pharmaceuticals, Inc. - VP of IR & Corporate Communications [2]

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Thank you, Regina. Good morning, and welcome to the AMAG Pharmaceuticals conference call to discuss our third quarter financial results and corporate update. Earlier this morning, we issued a press release. For those of you who don't have a copy, you can access it in the Investors section of our website at amagpharma.com.

Please be reminded that remarks made during this call may include forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We want to emphasize that these forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those discussed in such forward-looking statements. Please refer to our 2018 Form 10-K and our 2019 Form 10-Q, as well as those included in our presentation materials for a full review of the risks and uncertainties associated with our business.

On today's call, we will discuss certain non-GAAP financial measures with respect to our performance. We use these non-GAAP measures for financial and operational decision-making and as a means to evaluate our performance because we believe they better represent the ongoing economics of our business. The definitions of our non-GAAP measures are set forth in our earnings release, which was filed with the SEC today. Copies may be obtained at sec.gov and in the Investors section of our website.

We have forward-looking estimates of our long-term outlook. AMAG's growth trajectory and expectations for adjusted EBITDA on a multiyear time frame are based on a strategy of maximizing commercial product opportunities to fund investments in new products with various assumptions, including certain assumptions about the progression and approval of AMAG's product candidates and the continued viability of AMAG's commercialized products, including the Makena subcutaneous auto-injector. So please refer to these additional risk factors.

With me on today's call are Bill Heiden, our President and Chief Executive Officer; Dr. Julie Krop, our Chief Medical Officer; Tony Casciano, our Chief Commercial Officer; and Ted Myles, our Chief Financial Officer.

Let me quickly run through the agenda for this morning's call. Bill will briefly review the third quarter highlights. Julie will discuss the recent Makena FDA Advisory Committee Meeting. Tony will provide an overview of our recent launch of Vyleesi. Ted will cover our third quarter financial results and our updated 2019 financial guidance. Julie will then come back to provide an update on our development programs. And Bill will provide some closing remarks and then open up the call for Q&A.

With that, it's now my pleasure to turn the call over to Bill. Bill?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [3]

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Thank you, Linda. Good morning, and thanks for joining us on our quarterly update call. In the third quarter, we saw strong, consistent execution from our commercial teams. Revenue has increased in each of the first 3 quarters of 2019 for all 3 of our commercial products: Feraheme, the Makena subcutaneous auto-injector and Intrarosa. The growth is even more impressive on a year-over-year basis, as laid out in our press release. We're pleased with the continued strong performance of Feraheme, which is shown here on the left, which posted record revenue of $44.2 million in the third quarter, a 5% increase over prior quarter. Year-over-year, Feraheme revenues grew 20%. Feraheme's average market share grew to 17.5% in the quarter.

Shown in the center of the slide, Makena subcutaneous auto-injector revenues have stabilized around $40 million per quarter, which is roughly where we predicted they would be. With 4 intramuscular generics in the market, we're pleased that we've been able to capture and maintain nearly 2/3 of all FDA-approved hydroxyprogesterone caproate products. I know you all may have questions about the Makena franchise going forward following this week's advisory committee meeting, and Julie will cover this in a moment. But it's important to remember that Makena remains on the market and available to eligible pregnant women.

And finally, on the right, Intrarosa's net revenues grew to $5.6 million in the third quarter and the average TRx market share growing to 4.8% for the quarter.

I'm now going to turn the call over to Julie, who can provide an update on Tuesday's FDA Advisory Committee Meeting.

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [4]

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Thank you, Bill. Since we first announced top line results from the study earlier this year, we've been in ongoing discussions with the FDA to identify the appropriate path forward. On our Q2 call, we shared with you that FDA recommended an Advisory Committee Meeting to better understand and interpret the results of the PROLONG study. Since that time, we've been working closely with our publications committee to accelerate the publication of the PROLONG data ahead of the Advisory Committee Meeting as well as preparing for the meeting.

Just a week ago, on Friday, October 25, the PROLONG study results were published in the American Journal of Perinatology. Dr. Sean Blackwell, a Chair of the Department of Obstetrics and Gynecology and Reproductive Sciences at McGovern Medical School UTHealth in Houston was the lead author on the publication. And the publication lays out the author's perspective on the potential reasons behind PROLONG's results.

After reviewing the publication, the American College of Obstetrics and Gynecologists and Society for Maternal-Fetal Medicine updated their guidelines, reiterating their support for the use of Makena in this high-risk patient population.

Earlier this week, the Bone, Reproductive and Urologic Drugs Advisory Committee met to better understand and interpret the PROLONG study results in the context of prior studies. In the meeting, there was a lot of questions regarding the need for additional data and how to balance that with how to successfully conduct the U.S. study in the face of widespread use of 17P. Some members even felt the only way to get additional data was to remove the drug from the market. Importantly, 5 of the 6 OB/GYNs and 2 additional members voted in favor of keeping Makena on the market with a new confirmatory trial. 9 members voted to recommend that the FDA pursue withdrawal from the market.

As we've shared publicly, we are disappointed with the mixed vote. But it's important to remember that the advisory committee's vote is not binding, but the FDA will have to consider it in making their decisions. We are committed to exploring options on how to gather additional data that will be most informative to physicians and the FDA, and at the same time, working to ensure that eligible patients continue to have access to Makena.

I'll now turn it over to Tony to provide an update on the launch of Vyleesi.

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Anthony Casciano, AMAG Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [5]

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Thank you, Julie, and good morning, everyone. I wanted to start with a quick but important reminder of our market research, which indicates there are approximately 6 million premenopausal women with acquired generalized HSDD. And our team is proud to bring those women Vyleesi, the first on-demand treatment option. Since launching nationally about a month ago through our women's health sales force and digital outreach, the team has been focused on driving early awareness of Vyleesi. We've also prioritized early access through our co-pay program, which makes the first 4 packs of Vyleesi available to patients for a $0 co-pay and a maximum of $99 on subsequent fills. This co-pay program is helping eligible women access Vyleesi, while our market access team works to secure commercial coverage for patients.

While we're only about a month into the launch, we know you're probably eager to see some early indications of progress to date. On the qualitative side, we're seeing our presence on social media is providing women with a chance to engage in discussions about HSDD, illustrated by some of the posts shown on the left-hand side of the slide.

In addition, our sales force is finding physicians eager to engage in discussions about Vyleesi. These are consistent with the employee quote you can see on the right. And just to call this out, in case you're not viewing the slides, the quote says, "I have had 4 different providers requesting me to come by and detail Vyleesi." Those requests came from no access offices. For those not familiar with the term, no access offices, these are offices that historically will not allow sales representatives into the office.

We are also happy to see early signs of earned media, which we believe will continue to amplify our efforts to drive HSDD and Vyleesi awareness.

On the more quantitative side, you can see on Slide 11, some of the metrics we're tracking to the first month of launch. Our focus on digital has helped us reach more than 12.5 million women, and we've seen more than 120,000 symptom checkers completed to date. From a prescription perspective, we're happy to share that our specialty pharmacy partners have received more than 3,000 prescriptions, with more than 1,300 health care professionals prescribing Vyleesi to date. Again, it's early in the launch. So these are just a subset of the metrics we'll be sharing moving forward with you. And you can see on the bottom of the slide, the additional metrics we plan on providing on subsequent calls, as we work to keep you informed on the progress of the launch.

So early days, but so far, so good with Vyleesi and more to come as we progress further through the launch.

With that, I'll now turn it over to Ted to walk through the financials and guidance.

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [6]

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Thanks, Tony. Slide 13 shows our revenue by product for the third quarter of 2019 compared with the second quarter of 2019. On a sequential basis, you can see the Makena subcu auto-injector revenues for Q3 were very consistent with our second quarter results. We're pleased with the steady performance, considering a number of generic competitors in the intramuscular market. We believe this demonstrates the importance of the subcu auto-injector in a foothold that has been established in the market with continued great execution by our Women's Health, Maternal Health Commercial Team.

The next line item shows that the negative intramuscular revenue that we recorded in the third quarter has declined as compared to the second quarter. This negative revenue is primarily the result of our revisions to the estimated liability from Medicaid and commercial rebate obligations from Makena IM from past periods. It is common to revise the estimated liability based on new information, as new invoices are received. In many cases, these invoices arrive many months after the initial sale of the product.

Feraheme continues to perform very well, posting another record quarter of $44 million. This growth was all driven by volume and our Hem/Onc team continues to deliver strong results. We believe Feraheme will continue to be a source of steady cash flow.

Slide 14 shows our revenue by product for the third quarter of 2019 compared to the same period last year. Total revenues declined from $122 million in the third quarter of 2018 to $84 million in the third quarter of 2019. The key takeaway is the decline in Makena intramuscular revenues. You'll recall that on our second quarter earnings call in August, we announced that we were exiting the IM market, including the mutual termination of our contract with Prasco, our authorized generic partner. We made this decision due to increased generic competition as well as continued supply disruptions by our third-party supplier of intramuscular product, which resulted in a significant loss of market share for both the IM brand and our authorized generic.

This decline in Makena IM revenue was partially offset by growth in Feraheme, Intrarosa and the Makena subcu auto-injector. It's worth noting that Vyleesi revenue doesn't appear in the financial statements. Consistent with our go-to-market strategy of ensuring unencumbered access for women who are suffering from HSDD, we launched with a $0 co-pay for the first script and $99 max out-of-pocket for subsequent scripts. In future quarters, as the number of refill scripts grow and commercial coverage increases, net price realized for Vyleesi will also increase.

Moving down to P&L. Slide 15 represents operating expenses for the third quarter of 2019 compared to the same period in 2018. We broke out a couple of line items to better illustrate the trends driving our results for the period. Overall, total cost and expenses for the third quarter were down nearly $40 million year-over-year. During the third quarter of last year, we recognized approximately $30 million of amortization expense. Substantially, all of this was related to Makena IM product. During the third quarter of 2019, we didn't recognize any Makena IM amortization. R&D expenses in the third quarter increased approximately $5 million, consistent with our plan, primarily related to our development program for AMAG-423, including additional clinical site initiations in Europe. Also consistent with our plans, SG&A expenses in the third quarter of 2019 decreased year-over-year by nearly $7 million. This decrease was primarily related to our combination of our maternal health and women's health sales forces in February of 2019. This decrease was partially offset by increased direct-to-consumer marketing spend to support the launch of Vyleesi.

During the third quarter, we recorded negative EBITDA of $8.2 million compared with positive EBITDA of $30 million in the same period last year. We continue to carefully manage our expenses while still investing in our products and development programs. As we approach the end of 2019, we are adjusting our full year financial guidance. We have lowered the midpoint of our expected revenue range to $325 million from $340 million, driven primarily by lowered expectations of Intrarosa and the negative IM revenue that I discussed previously. We continue to manage our expenses very carefully, and this enables us to revise our expected EBITDA loss from a midpoint of $80 million to a revised midpoint of $70 million for the full year. It's important to point out the trend. Our adjusted EBITDA loss for the first half of the year was approximately $50 million, dropping to approximately $20 million in the second half of 2019.

As we consider our corporate planning for 2020, the Advisory Committee outcome on Tuesday is an important consideration. We believe in Makena, and we are committed to working with the FDA. In the meantime, we recognize that the Advisory Committee vote heightens the uncertainty around the durability of Makena revenue, and this informs our corporate planning. We are prepared for a variety of potential scenarios and continue to look for ways to optimize the value of our portfolio to maximize shareholder value. As we get clarity on the path forward regarding Makena, we'll be in a better position to provide more formal revenue and earnings guidance for 2020.

Over the next several months, we expect that the full impact of the Advisory Committee will be more clear.

We look forward to providing financial guidance to the investment community in January.

With that, I'll turn it back to Julie for a quick update on our development programs. Julie?

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [7]

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Thank you, Ted. As you know, we have 2 development stage assets in our portfolio. Ciraparantag is a small molecule designed to reverse anticoagulation in patients who have an urgent or serious bleed or require emergency surgery while taking anticoagulant therapy. We are currently in the process of working with FDA to gain alignment on the design of the next clinical trial. The proposed study will measure whole blood clotting time using an automated coagulometer developed by Perosphere Technologies. Before study initiation, the coagulometer must be cleared through an Investigational Device Exemption, or IDE, and then Perosphere Technology will submit the IDE once the design for the next study is finalized. The extra time we spend now will help ensure that the data we generate will allow us to have a successful end of Phase II meeting, which we plan to schedule after the study completion.

Regarding our other development program, AMAG-423, which is being developed to treat pregnant women with severe preeclampsia, an orphan condition with high unmet medical need, enrollment of the Phase IIb/IIIa efficacy and safety study is ongoing, and we look forward to updating you when the enrollment is complete. Bill?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [8]

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Okay. Here on our final slide, I just want to wrap up with a summary of areas of focus for the company as we look ahead. For Makena, it's continuing to capture the majority of this market with the subcu auto-injector, and also follow-up with the FDA to agree on a path forward that will generate the requisite additional data and ensuring that physicians and patients continue to have access to Makena. As Tony covered, we're encouraged by the early Vyleesi launch metrics and look forward to continuing to report the progress on this new product's launch trajectory. Feraheme performance has been strong quarter-on-quarter, and the team is focused on continuing that growth. We're opening new sites and working to continue to enroll patients with severe preeclampsia in the 423 clinical trial. We're also working closely with Perosphere Technologies to submit the automated coagulometer Investigational Device Exemption and initiate the next Ciraparantag clinical study in healthy volunteers as quickly as possible. And finally, continuing to focus on optimizing the value of our portfolio to maximize shareholder value, for example, exploring an ex-U. S. out-licensing opportunity for Ciraparantag.

And so with that, let me stop with our prepared remarks, and we'll open the call for questions. Regina?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question will come from the line of Ami Fadia with SVB Leerink.

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Ami Fadia, SVB Leerink LLC, Research Division - MD of Biopharma & Generics and Senior Analyst [2]

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I have a couple of questions, but I'll limit them to 3. Firstly for Julie, what type of study do you think is feasible to help provide the substantial evidence of efficacy from Makena? If you could sort of provide us with current thinking, could it be a RCT study or some sort of a registry study, if you could elaborate on that and also give us a sense of the cadence for discussing next steps with the FDA and what could the time lines around that be?

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [3]

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Yes, good question. I mean we obviously need to discuss this with the FDA. As far as study design, we're proposing -- we're committed to proposing a variety of different types of studies. I think the key is that we want to make sure we are able to, as you said, fulfill the need for substantial evidence. I think that can be done with a combination maybe of some PK/PD studies along with some prospective collected data for more observational type studies. But we're also prepared to do a randomized clinical control trial, if that is what is decided. But this has to be, obviously, in combination with FDA. As far as next steps and timing, it's hard for me to answer the question because we haven't sat down yet and had the discussion with the FDA. I think it's not going to be quick, and it's not going to take forever. So sometime in the, I would say -- and it's not going to be in the weeks, but more a few months, sometime in that time frame we'll have a much better idea, I think, of their -- where the timing will be.

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Ami Fadia, SVB Leerink LLC, Research Division - MD of Biopharma & Generics and Senior Analyst [4]

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Okay, okay. Maybe the next question is for Bill. Can you elaborate on some of the types of options or alternative courses you're exploring to maximize shareholder value, especially in the scenario where Makena may have to be taken off the market?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [5]

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Yes. Thanks, Ami. We certainly don't believe that is going to be the scenario, but we are fully prepared for that, and we thought through a variety of different scenarios. We've -- there are a number of different ways that we can approach this, but I will tell you some of the things we are actively working on today, which is ex-U. S. partnerships for some of our exciting development programs. I mentioned Ciraparantag, AMAG-423, another good example, where there is interest to partner outside the U.S. And so I think that's an opportunity to maximize value of the products that we have in our portfolio in the near-term, and so that's something that we're focused on today.

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Ami Fadia, SVB Leerink LLC, Research Division - MD of Biopharma & Generics and Senior Analyst [6]

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Would you consider something more kind of different with regards to maybe exploring partnership or monetizing some of the assets in the U.S.?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [7]

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Certainly, we're open to a number of different options. I think you may have seen that we are currently working with Goldman Sachs. And so certainly thinking about a variety of options is certainly on the table. Near term, what we are focused on is, obviously, working with the FDA to ensure that this important product Makena remains on the market for the patients who need it.

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Ami Fadia, SVB Leerink LLC, Research Division - MD of Biopharma & Generics and Senior Analyst [8]

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Okay. My third question, and the last one, I'll keep it at that is just on the pipeline. Maybe, Julie, if you could give us an update on what has -- what progress has been made on Ciraparantag over the last couple of months since the Analyst Day? And there seems to be some sort of a delay and if you could clarify for us what has been the reason for the delay there? And then on AMAG-423, what percent of the trial has been enrolled so far? And what's your best guess on when it will be completed?

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [9]

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Thanks, Ami. As far as the pipeline of Ciraparantag, there were subsequent to -- I think we all -- we had announced we were going to have a pre-submission meeting for the coagulometer. Subsequent to that, there were some additional analytic studies that Perosphere Technology had to conduct. And alongside that, there's been discussions with the FDA that are continuing, and hopefully, will be resolved soon on just the final design to allow us to really set ourselves up for successful end of Phase II meeting as we go into the patient study. And then I'd say the -- as far as timing, unfortunately, we really are not updating enrollment. As we've said before, this is a highly unpredictable population in terms of when they will come into the study. It's a rare orphan condition. So I think it's better that we update you when we know rather than try to guess because it's a hard -- this is not easy to predict. This prediction is difficult.

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [10]

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Ami, one of the things we mentioned this morning is we've recently opened some new sites in Europe, and as we've modeled out the enrollment in this trial, we do believe that we'll get some significant enrollment from some of those European sites. And so we're optimistic that those sites are going to open the aperture in terms of additional patients coming into the 423 trial. And then just to reiterate on the Ciraparantag trial, this is the last trial we believe before we actually go into patients. And so we want to ensure that this trial will give the agency exactly what they need as we go into the end of Phase II meeting to initiate that really important Phase III program.

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Operator [11]

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Your next question comes from the line of Douglas Tsao with H.C. Wainwright.

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Douglas Dylan Tsao, H.C. Wainwright & Co, LLC, Research Division - MD & Senior Healthcare Analyst [12]

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Just maybe, Ted, if you could just start a little bit about the EBITDA trend. Obviously, we've seen some improvement from the first half of the year already, and we've seen some reflection in the guidance. Just curious, should we expect some further improvement in the fourth quarter? And do you expect -- what will you expect to see going forward, is that going to be more from some further rationalization of the expense line or expectations around growth from the revenues in the portfolio?

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [13]

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Yes. So as I mentioned in my remarks, for the first half of EBITDA negative of $50 million combined for the -- in aggregate for the first half. And now with the revised guidance, implying or really speaking to a second half of the year at $20 million, $8 million in the third quarter. If we were being literal, that would imply $12 million for the fourth quarter, but we want to give ourselves a little bit of room. So I think the trend that you saw in the third quarter is going to be indicative of where we end up in the fourth quarter about. The big wildcard is we expect that we're finished with the negative revenue from IM. And if you look at third quarter of $7 million and make that $0 million in the fourth quarter, that's all pick up. So it remains to be seen. But we are -- in terms of expense management, we've been very diligent about how we're allocating capital. We have shifted to emphasize Vyleesi, obviously, in a launch, good early launch metrics. We want to keep supporting that. The budget through 2019 accounts for that. And we're looking at how we continue to support that in 2020.

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Douglas Dylan Tsao, H.C. Wainwright & Co, LLC, Research Division - MD & Senior Healthcare Analyst [14]

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And Ted, as a follow-up on that. I mean, in terms of R&D spend, you saw a little bit of a step-up, just given the ongoing activity. Is that something that will continue to trend up a little bit? And then in terms of the spend for Vyleesi, is that at the rate now? Or as the product sort of moves into other stages of commercialization, could we see some increase on the spending there?

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [15]

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So I'll start with Vyleesi. Vyleesi, the die is sort of cast through the end of the year. And as we get closer to the end of the year, we'll start to cast the die for Q1 and Q2 based on what we see in the launch metrics. As Tony mentioned, the launch metrics are favorable. We've got a very interactive dashboard here. So we're managing the spend to revenue and trend lines very carefully. In terms of R&D, aggressively pursuing enrollment of new sites, as I mentioned, in Europe, that's expensive, but that's what we will help to enroll the patients and get this trial completed. And obviously, Ciraparantag is -- continues to be a very big priority. Part of this is in 2020, there might be additional spend for Makena, which would be a pretty good outcome.

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Douglas Dylan Tsao, H.C. Wainwright & Co, LLC, Research Division - MD & Senior Healthcare Analyst [16]

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Okay. And then just on that note, I mean, do you have a sort of a sense of the time line that we should be following in terms of when we might see a final decision on this?

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [17]

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With respect to Makena?

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Douglas Dylan Tsao, H.C. Wainwright & Co, LLC, Research Division - MD & Senior Healthcare Analyst [18]

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Yes.

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [19]

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As Julie mentioned, her and her team are focused on that and kind of hard to predict. This news is 3 days old. We're active where -- Julie and her team are actively engaged, but no news at this point, so it's hard to predict the time line.

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [20]

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But as Julie said, I think, Doug, this plays out -- this is Bill. This plays out over a number of months. It's not weeks. There'll be ongoing discussions with the agency. As Julie said, our goal is to begin interacting with the agency on a study or studies that could be pursued in order to meet their desire for additional data. So I think this is going to take some time. And in the meantime, Makena remains available, and our team is committed to ensuring that all patients who are at risk for a preterm birth continue to have access to Makena and especially the subcu auto-injector.

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Operator [21]

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Your next question comes from the line of Balaji Prasad with Barclays.

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Balaji V. Prasad, Barclays Bank PLC, Research Division - Director [22]

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So I know you addressed Makena and the potential outcomes from now, but to -- sorry to belabor the point, but if in case you do get a request to remove the products in the market, is there anything that you can do to delay the process or to offset it?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [23]

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So as you mentioned, if the FDA were to pursue something like this there would probably initially be a request to the company. We are committed to Makena. We believe in the efficacy and safety as to the majority of the guidance in the United States. If the FDA would then -- to pursue a path, there would be a public hearing, and so there's some -- there's time involved in preparing for that. And then ultimately, if the decision went not the way we would like because there's no safety issue here, this, again, plays out over a fairly lengthy period of time because the question that's been raised is a second confirmatory trial, nothing about safety was raised. And so it's really honing in on how do we confirm the efficacy of Makena for the FDA.

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Balaji V. Prasad, Barclays Bank PLC, Research Division - Director [24]

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Fair enough. So I do understand and appreciate that nuance. So if it comes to 2020 and the way we had to think about it now, then it's either you would see the market being on the product or if it goes on the product, your cost will go up if you're happily asked to do some additional confirmatory trials. Is that how we need to think of 2 broad scenarios?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [25]

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Yes. And I think they do additional work on Makena, again, that's likely not rapid. I think you know the most recent clinical trial on Makena took about 10 years to enroll. So it's a lengthy process. Smaller things like a PK study could be done relatively quickly. Those are relatively inexpensive. And then some type of registry initiative, which we've talked about, which could be interesting where we track the utilization of the subcutaneous auto-injector, I think could be helpful in terms of generating data and could be also helpful in terms of supporting the subcu auto-injector.

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Balaji V. Prasad, Barclays Bank PLC, Research Division - Director [26]

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Understood. One final question on the cost side. I believe that last quarter your professional consulting cost went up by around 58%. I'm not sure I could pick it out in this quarter. What is it?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [27]

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Professional and consulting increased. Balaji is asking about professional and consulting.

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [28]

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So that falls in the bucket or in that bucket is external spend in terms of marketing.

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Balaji V. Prasad, Barclays Bank PLC, Research Division - Director [29]

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Sure. So I believe the number was $45 million last quarter. What was it in Q3?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [30]

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Ted's pulling out his papers. Just a second, Balaji.

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [31]

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So what number you're referring to, Balaji?

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Balaji V. Prasad, Barclays Bank PLC, Research Division - Director [32]

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The professional and consulting charges.

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [33]

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So that's a number that's broken out in our Q. Yes, which we'll file at the end of the day. All right. So I was kind of assuming it was in the press. Yes, that's a very detailed number that's in the Q. Why don't we -- we'll get the Q filed shortly, and we can have a call to discuss it.

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Operator [34]

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Your next question comes from the line of Gregg Gilbert with SunTrust.

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [35]

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I have a few. First for Ted, is your prior outlook for 2020 still on the table? Or should we consider that suspended pending the FDA update and some of the other dynamics?

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [36]

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No, it's still on the table. If you -- are you referring to EBITDA neutral?

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [37]

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Yes.

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [38]

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Is that -- yes. So look, our operating plan before Tuesday that we were developing internally, and you can see the trend in the 2019 financials is getting us to EBITDA neutral. As we talked about, we don't see a rapid disappearance of Makena in 2020. So in the base case, we still expect substantial revenues from Makena. Obviously, we're prepared for all cases because Tuesday heightened the risk profile of the durability of the revenues. And that could be some impact in 2020. So we're prepared for all these cases. We looked at all the scenarios. This is why I really want to preserve comments for specific guidance when we learn a little bit more, as Julie and her team engage with the FDA to figure out what path we're on. But as we sit here today, that EBITDA neutral is still absolutely on the table.

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [39]

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Okay. Moving to Vyleesi. When you say that the metrics are favorable, and thanks for sharing those because we don't really have much to go on, what do you mean by favorable? And what is that relative to? Is it your internal expectations on these very specific metrics? Are you benchmarking them compared to other launches? Really looking for how those metrics -- how confident you are that those metrics are going to tie to you saying later that net revenue generation is actually favorable as well. For sure in early things to collect?

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Anthony Casciano, AMAG Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [40]

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Yes, absolutely. I think I want -- this is Tony Casciano. So yes to all those things, right? So we have our internal assumptions based on what we expect this product to be long term. Certainly not going to share those projections today. But where we are at 4 weeks is in line with where we would hope to be at this point. Again, 4 weeks does not make a launch. But based on where we're at, at this mile marker, it's where we want to be. That's internally. Externally, it's more challenging. There aren't a ton of good analogs. But as you stack them up and look at recent launches through 4 weeks, we stack up quite well, I would argue, and you can do that math. Specifically, if there's one analog and again, it's not a great one, but it's the most reason for HSDD is Addyi. And if you look at where they were at this kind of mile marker, we are multiples higher than that. Again, we aspire to a different long-term projection. But based on where we're off in 4 weeks internally and externally, I would say by all marks we're encouraged.

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [41]

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Okay. And Julie, just to go back to the feasibility of another study, maybe start with a general question. It seems like the company's dialogue is that -- or assertion is that caregivers believe the product works and want to keep having access to it. If one were to just listen to the panel, they would have heard, I think, the opposite. These panelists were highly questioning whether the drug works or not. There seems to be agreement around it being safe. There seems to be some concern by some panel members that what if we remove it, what will people do? And will that be safe? But there seem to be some pretty good agreement around the questioning of the efficacy and that there aren't even any obvious subgroups where it clearly works, such that if every labeling were to occur we know what subset would actually benefit. So do I have it right that the panel does not believe the product works on the efficacy front, but that you believe many clinicians do believe it works? I just want to understand that at a high level before I ask my more specific question.

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [42]

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Yes, I think it's really complicated and nuanced because the Meis trial studied a very different patient population of high-risk women, and it was substantially positive. And I think that most people would agree that, that trial was very -- definitely demonstrated efficacy. And I think this last trial, while being larger, was also not representative of the U.S. population. It was -- as many of the panel said, the event rates were very, very low, and it was a healthy patient population. So I think that the community is very supportive in general of the product. I think there was a lot of voice of the statisticians. As you look at the numbers, clearly, the PROLONG study was negative. But it's all in how do you interpret that and what's relevant to people's patience here today in the United States. And I think if you talk to most OB/GYNs, they'd say their patients are more like the Meis trial than they are like the PROLONG study. So it's -- I think that they're still in -- you saw the reiteration in the guidances of both ACOG as well as SMFM, I think those are strong endorsements that there's still a belief that there's efficacy and strong safety in Makena, and they want it to remain on the market as an option for patients.

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [43]

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Gregg, this is Bill. I would also just add. My impression of the Advisory Committee was that the clinicians, the OB/GYNs on that panel were very supportive of the efficacy of Makena. And as Julie said, this Advisory Committee was kind of overpopulated with statisticians who are not clinicians, and were purely looking at statistics. And as you point out, struggled a little bit to say, well, I can't figure out which patients benefited statistically as I look across these studies. And of course, the clinicians who are saying that's common with drugs. And, in fact, most drugs don't -- 100% of patients don't benefit, but we still use these therapies because we know there are patients that benefit. So my impression was the clinicians, specifically the OB/GYNs on the Advisory Committee were very supportive, but there were some other constituents on that Advisory Committee that I think had a harder time really understanding the nuances of maternal health care.

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [44]

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And I think the other problem was the clinicians who were very supportive, unfortunately, didn't speak up enough during the meeting. You heard the support that they rendered at the end after the vote, which was probably too late. But all those comments are in the record that they made even after the vote, and the FDA obviously considers those very seriously, especially since those are the people who are taking care of these patients. So even though they didn't voice that as loudly during the meeting, I think, that's all in the record that they are supportive.

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [45]

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Okay. I think several of them voted no on efficacy, but that's a separate -- I guess, that's a separate issue. You're sort of characterizing their overall support, but the votes were the votes, right?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [46]

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Clinicians, again, 5 out of 6 of the OB/GYNs supported Makena remaining on the market.

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [47]

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And it's hard to vote positive for the PROLONG study because it was a negative study. They all did vote negative on that, and that would be -- I think, the questions were set up in a way that you sort of had to say no, right?

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [48]

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Great. Lastly, so the ACOG and the Society for Maternal-Fetal Medicine, those sort of updates you alluded to, do you think they will be permanent? Or are they willing to flex those kind of real-time as the FDA updates what it wants to do?

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [49]

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I think the committees are not going to make their decisions based on FDA. They're going to make their decisions based on data. And if new data comes out, that will affect their decisions. I don't think they're going to be affected necessarily just by what the FDA says. They typically are data-driven organizations that are focused on what is best for their patients and their patient population. I can't speak for them.

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Gregory B. Gilbert, SunTrust Robinson Humphrey, Inc., Research Division - Analyst [50]

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Okay. Lastly, Bill, you'd mentioned the processes or process being run by an investment bank. Can you give us a little more flavor for what's being looked at, what's not being looked at and maybe a general time frame? Should we have some sort of update by the time you guide in January? Or is this more of a longer-term sort of process?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [51]

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Sure, Gregg. The -- we -- periodically, our Board is constantly reviewing strategic options. So this isn't a special process. We have worked with external advisors in the past to review options. And as part of this most recent public thing that played out, we did announce that we're working with Goldman Sachs. So that we don't -- normally we don't do that, but in this case we did announce that we're working with Goldman Sachs. And those advisors will work with management and the Board over the coming weeks and even months because, again, this is not a onetime process, this is really a continual process where we're challenging ourselves, how can we best maximize shareholder value. We're seeking external advice as well as, obviously, working with our Board. So no definitive time line on this. As I mentioned, some of the things that we're also actively pursuing are partnerships ex-U. S. And while there's no firm time line on those, those are actively in process. So I anticipate that as those come to fruition, we'll be able to provide updates there.

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Operator [52]

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Your next question comes from the line of Jessica Fye with JPMorgan.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [53]

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You talked about kind of scenario planning in light of the Makena uncertainty. I know it's early. Can you set any adjusted EBITDA floor for a worst-case scenario if Makena must be withdrawn? And then kind of second part to that, given that there could be months before you get clarity here, when you guide in January, if there is not clarity yet, can you give us a framework about how you might do that? Would you give kind of 2 scenarios? How would that look?

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [54]

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Jess, it's Ted. As I mentioned, it is really early. I think, as I mentioned -- as we mentioned, in May at our Analyst Day, again, in August, committed to be EBITDA neutral as we continue to invest in our portfolio. Obviously, a key dependency are our current commercial products. The $50 million in the first half and the $20 million loss in the second half trend points to EBITDA neutrality next year. That's our internal operating plan base case, but we have to incorporate the facts as they reveal themselves over the next couple of months. Obviously, your conference is the moment to really give formal guidance and at that time, we'll provide the best information we have at that time. I can't handicap when I'll know, what I'll know, it's just too early.

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [55]

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One of the things we can do, Jess, is we'll -- as Ted mentioned, we'll provide formal guidance and also provide some of the underlying assumptions in that guidance so that people understand on the basis on which we're providing that guidance.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [56]

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Okay. Got it. Yes, I feel like, at some point in the past you might have given like kind of 2 different versions, like kind of like an if/then version of guidance. So I was kind of wondering if it could look similar if we haven't like kind of heard a final call yet.

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [57]

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It might, it might. And I think we were talking about this over the past couple of days, of course. It reminded Bill and me as we were going into 2018, there was also a period of a wide range of potential outcomes. We didn't know what the generics were going to do, we didn't know if the auto-injector would be approved. And we were forced to provide guidance. And I think we navigated that pretty well. Things broke our way in a lot of ways, and we were able to increase guidance several times throughout that year. This is another range of -- a wide range of potential outcomes. So we'll be well equipped to navigate it.

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [58]

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But I want to reiterate that because there have been no safety concerns raised, I don't anticipate that this plays out quickly. I think this plays out over a fairly lengthy period of time, which may make it a little easier for us to navigate a guidance.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [59]

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Okay. And then I think, following up on a prior question, with the OpEx reductions you're clearly realizing in the second half of this year. Can you talk about where you're finding that savings? Is it on marketing spend? And then in order to get to that EBITDA neutral next year, it clearly sounds like you anticipate some further OpEx rationalization. So can you help us understand where that would come from?

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [60]

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Yes, why don't I answer the first one and then tie the second answer back to the answer to the earlier question. So as you know, we consolidated the sales force in January of 2019 and that yielded -- that took a significant amount of cost out of the organization. We've been allocating a lot of that cost to external costs, we were supporting Intrarosa pretty aggressively in the first half, and we shifted those resources and really reduced the Intrarosa spend in favor of Vyleesi in the second half. So on apples-to-apples basis as you roll into 2020, we're really only supporting one product launch. So that's the lion's share of the savings.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [61]

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Okay, great. And then maybe just the last one, following up on -- I think it was the very first question on Ciraparantag. Can you elaborate on some of the aspects of the healthy volunteer study you're describing that you're working through with the FDA? Just to make it very clear, is this trial akin to the Phase IIIa that you previously described or is this a new Phase II? I'm trying to understand because now you're talking about an end of Phase II meeting happening after those results, I think. But at the Analyst Day, you were talking about an end of Phase II meeting this fall before a Phase IIIa. And then in response to an earlier question, you also talked about going into patients right after this trial. So just trying to understand kind of what's happening here?

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [62]

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Yes. So the -- I think this is one of Symantec's. So the IIb is really a IIIa. You could call it either one. This is a healthy -- we're still working on a healthy volunteer study prior to going into a patient study. The patient study would be the definitive Phase III study. This is more of a confirmation with the new automated coagulometer that we have the right dose that we looked at in the IIb study with the manual full blood clotting time. And so confirming that and then moving forward after we have that data into the end of Phase II meeting, we feel the end of Phase II meeting will be stronger if we go in with that data.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [63]

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Okay. And what are the aspects that you're still kind of hammering out with the agency about that trial?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [64]

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So yes, some of the things, and Julie mentioned this already that the agency had asked for some additional analytics on the coagulometer. So Perosphere Technologies has been pursuing that so that we ensure ourselves that we get the IDE in and it gets approved rapidly. And then you can imagine part of -- as we get information on data points, for example, on blood draws and when data points that are desired in a healthy volunteer study that weaves then back into the healthy volunteer study. And so there's been some discussion with the agency on exactly the details of the design of this trial. And as Julie mentioned, it's really important that we get alignment with the agency so that when we go into this end of Phase II meeting, we've got everything we need to get started on this Phase III program.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [65]

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Okay. And when you talk about analytics on the coagulometer just to support that IDE, is the IDE gating for starting this healthy volunteer study? Or do you generate some of that data in this healthy volunteer study?

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [66]

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So the IDE is gating. So you have -- we have to have all that data in order for us to use the coagulometer in the study. And the reason for that really is because it would be a decision-making study. It's not because the coagulometer itself is in any way dangerous. It's more that the data that is generated from it is used to make decision-making on dosing. And so that's why it needs to be -- the analytics have to be sort of all buttoned up and put through the IDE prior to the start of the study.

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [67]

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It's interesting, Jess. In preparing the IDE, you do gather data from healthy volunteers using a coagulometer. So that data is submitted. And once it's approved, then we go into the study where we are studying the NOACs and Ciraparantag in healthy volunteers.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [68]

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Okay. Got it. And the healthy volunteer study, is that looking like mid-2020 study start? Or can you put a band around when that could kick off?

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [69]

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I think as soon as we get agreement with the agency, we're prepared to start that. There's, I believe, a 30-day review time line on the IDE too, is that correct? Yes. So assuming that goes well, then after the 30 days, you can go forward with initiation of the healthy volunteer study.

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Operator [70]

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Your next question will come from the line of Serge Belanger with Needham & Company.

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Serge D. Belanger, Needham & Company, LLC, Research Division - Senior Analyst [71]

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Most of my questions have been answered here. So just a couple. First on Feraheme. Obviously, we've seen continued strong growth there. Can you maybe talk about additional opportunities going forward? Is it going to come from growth in the iron market or additional contracting?

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Anthony Casciano, AMAG Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [72]

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Yes, so this is Tony. So our anticipation is that continued growth will come from 2 things. So the market continues to grow. So the IV iron market itself was growing. And as Bill mentioned, and as you saw in the press release, we continue to pick up share gains over time, and that's through both contracting, but most importantly, clinical selling and differentiation against our competitors.

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Serge D. Belanger, Needham & Company, LLC, Research Division - Senior Analyst [73]

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Okay. And then on the women's health franchise, obviously, focus now turns to the Vyleesi launch, what does that mean for Intrarosa? Does it take kind of a secondary focus in terms of promotion? Is DTC promotion still ongoing there?

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Anthony Casciano, AMAG Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [74]

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Yes, good question. So there is DTC in the marketplace today just as there is sales professionals promoting the product today as well. I think as Ted mentioned, as we start to move through the back half of this year into next year, the effort is going to shift more towards Vyleesi. However, I think it's important to point out, we are still actively promoting Intrarosa. So this is not a walk away scenario, I want to be clear about that. This is essentially a shifting of effort to make sure that we're appropriately promoting all 3 of our products with that sales force. So Makena, which, as you know, is still in the market, helping people, Vyleesi and Intrarosa.

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Operator [75]

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Your next question comes from the line of Chris Raymond with Piper Jaffray.

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Christopher Joseph Raymond, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [76]

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Just a couple. Bill, I know some folks have touched on this in the past and maybe Julie, but on the plan to conduct studies that you guys are outlining, I think I heard the FDA say several times during the adcom that it would be nearly impossible to conduct additional studies with the drug on the market. And actually, even some of the docs who voted to keep Makena on the market acknowledge that. So I guess, when I hear you guys talk about conducting additional studies, I think I hear you talking about doing that with the drug remaining on the market. So could you, first of all, maybe square that? What's the scenario that you're able to do that?

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [77]

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So -- Chris, this is Julie. There are several scenarios where we can still study the drug with it on the market. I think that some of the things we talked about registry, some of the PK/PD, looking at preterm birth rates by exposure to the drug, that could certainly be done and does not need to be a randomized placebo trial, but we could also go outside of the U.S. and do a randomized controlled trial. Obviously, we've been very cautious about where we go and making sure that we are going to a place that's more similar to the U.S., but there are places that we could do that. I think it's hard to get ahead of ourselves. We really need to sit down with the FDA and have these discussions before we speculate. And -- we have ideas, but it will ultimately, what matters is we make sure that we are working and getting aligned with the FDA on the study design.

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Christopher Joseph Raymond, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [78]

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I mean, but just PROLONG was conducted primarily outside the United States, right? So I guess, I'm curious how that changes.

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Julie Krop, AMAG Pharmaceuticals, Inc. - Executive VP of Development & Chief Medical Officer [79]

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Yes. So when we -- so we inherited the drug when it was already 50% enrolled, and a lot of the effort had been in Eastern Europe, which was, as you know, Ukraine and Russia. Ideally, this time, we would go to a health care system that would be closer to the United States, to spend more time and effort on Europe, potentially South America, places where there would be more consistent standard of care than there probably is in Eastern Europe.

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Christopher Joseph Raymond, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [80]

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Okay, great. And then maybe I'll ask a question that you may not be prepared to answer now. But I guess, as you guys look at this market, so as I understand, actually, through the years, about 1/3 of the market even before PROLONG was published, has sort of stayed stubbornly non-17P and there's obviously also a significant Medicaid component to the payer mix. So just maybe talk about, even under the scenario where the drugs allowed us to remain on the market, as you've done your market research, do you think that dynamic stays the same? Or do you believe that, that 1/3 number stays the same? Or is there a chance with a relatively definitive study now that, that 1/3 number grows? Just kind of curious how you see that playing out.

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Anthony Casciano, AMAG Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [81]

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Sure. So maybe I'll take that. This is Tony Casciano. It's a good question. I think a lot in that question. So let me start with the payer question and how Makena is reimbursed today. Again, our assumption is that is -- any change is going to be predicated on the guideline changes. That's not an absolute, that's not 100%, but in most cases payers will follow the guidelines. And again, PROLONG has been out for a bit. It was out before the adcom. I think the guidelines were restated in association with -- not association, but in reflection upon PROLONG. So I wouldn't expect much payer action outside of any guideline changes. So that would be the kind of first Q for us to look for payer challenges moving forward. From an overall market perspective, again, I think this information, some element of it has been out there for some time, and physician feedback to date is they reaffirm their confidence in the product. Again, we're a couple of days outside of the adcom. So it would be premature to say how they're positioning or how they're interpreting that, but we'll continue to watch. And we've been encouraged so far with physician response and have not seen payer action in response to PROLONG to date. So again, just to restate, I think it comes down from payer perspective, they'll be watching carefully the guidelines, and we are encouraged by the guidelines so far in light of the new data that was released.

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Christopher Joseph Raymond, Piper Jaffray Companies, Research Division - MD & Senior Research Analyst [82]

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Okay. And then maybe one final question, and this is on Vyleesi. So just trying to understand what -- if you could maybe put some brackets around what you think appropriate refill rates might be? I know you guys talked before the label was published about 80% of women completed the trials like to stay on the open-label extension study. But when we look at the -- actually, in the details of the label, it looks like around 40%, actually, of the patients who are actually on drug completed discontinued before completing the trial. So how should we think about a good refill rate? Is it 60%? Or is it some other number?

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Anthony Casciano, AMAG Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [83]

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Yes. So I would -- I'm not going to throw a model assumption out there, egads. I think it's super early. We certainly have one modeled. And we've got a lot of things modeled. I think it's probably early to throw out a bunch of number to you guys other than the 3,000 prescriptions that we're seeing coming in through the SPs and the 1,300 physicians that have written them. We are seeing some small level of refills already. And that's just 4 weeks. Certainly not going to report what that statistic is because I don't know if that's going to hold. I certainly hope it grows, but we're encouraged by seeing some element of retail already just 4 weeks in. So I'll probably leave it at that.

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Operator [84]

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Your final question will come from the line of Eun Yang with Jefferies.

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Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [85]

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So for Intrarosa, about 2 years into the market, annualized sales run rate is a little over $20 million. So it's fair to say that this has been a disappointment. So now with Vyleesi, I understand that it's still very early in the launch cycle, what's your expectations? Do you expect that this would be significantly better? And second question is how important Vyleesi is in your expectations for reaching breakeven next year?

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Anthony Casciano, AMAG Pharmaceuticals, Inc. - Executive VP & Chief Commercial Officer [86]

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Sure. So maybe I'll take the first 2 and let Ted handle the last one about how our Vyleesi expectations fit into expectations for next year. So the Intrarosa launch, I think it is, obviously, the sales that we generated to date are south of what our expectations have been and have been. And how that relates to Vyleesi? Yes, easy to say, we expect Vyleesi to be a more successful launch. Obviously, we would be upset if it was not. But they differ in a lot of ways, right? So I would hesitate to put those 2 products against each other and use Intrarosa as an analog. Different product, different patient type, it's different, different, different, right? So again, I think we'll do our best to keep you up-to-date on the metrics that we're seeing because we understand you're not seeing a lot out there through the available sources. And again, I would just reground everybody that 4 weeks does not make a launch, but at this point, through 4 weeks, we're encouraged by what we're seeing and those facts are 3,000 prescriptions received by the specialty pharmacies, with 1,300 physicians writing them. So again, I think, so far, so good at 4 weeks, and we'll look forward to sharing more on the next call.

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Edward H. Myles, AMAG Pharmaceuticals, Inc. - Executive VP, CFO & Treasurer [87]

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Yes. And even in terms of how it drives the 2020 numbers. I mean, obviously, we're expecting revenue. I talked about as we sit here today and probably for the next couple of quarters, early access program, $0 co-pay, $99 max. And before we have a whole lot of commercial coverage. Net price will be pretty low for this product, but the key theme and the key launch metric is breadth of prescriptions and number of prescriptions. So what that tells you as you get into 2020 is we're not counting on a lot of revenue, but we'll be monitoring the other metrics to continue to justify investment and to inform investment strategies around the product.

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Operator [88]

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I will now turn the conference back over to Bill Heiden for any closing remarks.

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William K. Heiden, AMAG Pharmaceuticals, Inc. - CEO, President & Director [89]

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Well, I want to thank you all for joining us here on today's call. And before I close, I do want to thank my colleagues here at AMAG for all their hard work over the last quarter, which has been a busy one. And we're going to continue to work hard for our shareholders and in support of the hundreds of thousands of patients that we serve. We look forward to continuing to provide updates across the performance of our commercial products and progress on our development programs.

And with that, we'll conclude today's call.

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Operator [90]

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Ladies and gentlemen, this concludes today's call. Thank you all for joining, and you may now disconnect.