AMAG Pharmaceuticals Inc. (NASDAQ: AMAG) Q1 2020 Earnings Call Transcript

AMAG Pharmaceuticals Inc. (AMAG) Q1 2020 earnings call dated May 11, 2020

Corporate Participants:

Linda Lennox — Vice President of Investor Relations and Corporate Communications

Scott Myers — President and Chief Executive Officer

Tony Casciano — Executive Vice President and Chief Commercial Officer

Edward Myles — Executive Vice President, Chief Financial Officer and Chief Operating Officer

Analysts:

Ami Fadia — Leerink — Analyst

Douglas Tsao — HC Wainwright — Analyst

Jessica Fye — JP Morgan — Analyst

Serge Belanger — Needham & Company — Analyst

Presentation:

Operator

Good morning, my name is Michelle and I will be your conference operator today. At this time I would like to welcome everyone to the AMAG Pharmaceuticals First Quarter 2020 Earnings Call. [Operator Instructions].

It is now my pleasure to turn today’s call over to me, Linda Lennox, Vice President, Investor Relations. You may begin your conference.

Linda Lennox — Vice President of Investor Relations and Corporate Communications

Thank you, Michelle. Good morning and welcome to the AMAG Pharmaceuticals conference call to discuss our first quarter 2020 financial results. 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 2019 Form 10-K, our Form 10-Qs and 8-Ks, as well as statements included in our presentation remarks, for a full review of the risks and uncertainties associated with our business.

On today’s call, we will discuss certain non-GAAP by the initial 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 are conducting today’s call with participants in different locations given the COVID-19 pandemic. So we ask that you please bear with us if there are any technical issues. We do have a team and a process in place to handle issues, should any arise. With me on today’s call are Scott Myers, our newly appointed President and CEO; Ted, Myles, our Chief Operating and Chief Financial Officer; and Tony Casciano, our Chief Commercial Officer. Scott will kick off the call with some introductory remarks, including executing in a COVID-19 environment. Tony will provide a commercial update and Ted will cover our financial results and guidance. Scott will conclude the call with the status of our 2020 goals and then we’ll open up the call for Q&A.

With that, it’s my pleasure to now turn the call over to Scott.

Scott Myers — President and Chief Executive Officer

Thanks Linda. Good morning everyone and thank you for joining us. I joined the company just about two weeks ago, and I’m very pleased to be fully engaged with the executive team and AMAG as a whole. I have been in the pharma, biotech and medtech space for nearly three decades. I’ve served as a Chairman and/or CEO in my last three roles leading the companies through a development stage and with their commercial assets. Most recently, I served as Chairman and CEO of Rainier Therapeutics, a clinical stage oncology company focused in metastatic bladder cancer. Previously, I served as CEO and Director at Cascadian Therapeutics. Cascadian’s lead asset tucatinib, which is now TUKYSA at Seattle Genetics, in combination for treatment of HER2 positive metastatic breast cancer for patients with and without brain mets, was recently approved by the FDA. Seattle Genetics acquired all the assets of Cascadian in 2018. I also had the opportunity to be CEO of Aerocrine AB, a Swedish medtech company based in Stockholm, Sweden. I spent the development portion of my career in management consulting, before moving into industry and taking on increased senior management responsibilities, with companies such as Johnson & Johnson, DOV and UCB Pharma. In all, I lived and worked overseas for approximately nine years, so I look forward to bringing some of those perspectives and experiences to bear here at AMAG.

Many people have asked me why would you joined AMAG now, with the broader impacts of COVID and given AMAG’s previously announced changes? The last several companies that I’ve helped lead also had a myriad of challenges, spanning their entire enterprise and we found solutions. I believe that will be the case here as well. This company has high-value products that meet critical unmet needs in the marketplace. We have fully integrated sales, marketing, sales operations and medical affairs to support the market and with the backdrop of COVID, our healthcare providers and their patients really need us at this point.

I’m looking for forward to helping AMAG become more nimble, improved decision-making and communication and engage even more actively with the shareholders. I’ve already spoken to a few shareholders, and we will continue this effort after this call, as well as have discussions with the analysts that provide coverage on AMAG.

In my short tenure, I’ve brought a few guiding principles that our executive team will continue to evolve the focus on what is important is the underlying theme; focus on our core business, manage expenses and headcount to be prepared to grow this company, utilize business development to bring in non-dilutive capital to strengthen our balance sheet and also look for products that can be added to our field teams promotional and medical education efforts.

The ultimate goal is to serve unmet needs for the patients and providers and if we do that efficiently through marketed products and developing the potential of our pipeline, unlocking the shareholder value can then begin. The Board of Directors and the executive leadership team, along with the rest of our AMAG associates, have welcomed me with open arms, so I’d like to share with you some excellent progress in a very challenging environment.

So let’s turn to page 5; AMAG is going through an evolution, and as previously announced, we are progressing with our plans to divest Intrarosa and Vyleesi. We are in negotiations now and look forward to updating everyone by the end of second quarter. The transition out of consumer-driven women’s health products will mark an important milestone on our path to increase shareholder value and sharpen our focus on our priorities and maximizing Feraheme’s value, retaining patient access to Makena and continuing to efficiently develop innovative therapies, including ciraparantag.

Despite solid first quarter results, AMAG’s products are being adversely impacted by the COVID-19 pandemic, as patient visits have declined during this period. This should not be surprising as across the country, the pandemic has led to decline in medical visits for conditions and illnesses not related to COVID-19. Given the impact of COVID-19 in the planned divestiture of Intrarosa and Vyleesi, AMAG has made the decision to implement a company-wide restructuring of about 30% of our workforce. In total, we reduced our headcount by about 140 positions. This was a very difficult decision, I’d like to take a moment to recognize the contributions of our colleagues who are leaving AMAG, and wish them well.

As we look towards the future, we believe we have taken steps to right size our organization. We are laser focused on maximizing hematology, oncology and maternal health, reviewing our existing pipeline and developing innovative therapies. We are currently in the process of exploring additional opportunities to grow our hematology-oncology business, both on the business development front, as well as lifecycle management.

I am now going to turn it over to Tony to provide a commercial update. Tony?

Tony Casciano — Executive Vice President and Chief Commercial Officer

Thank you, Scott, and good morning everyone. On slide 6, I’d like to take just a few minutes to provide an update on our performance in the quarter for both Feraheme and Makena. I’ll then do my best to provide you with some color on the COVID impact we are seeing today.

Starting with Feraheme, yet another strong performance by our Hem/Onc team with record revenues of $44.4 million in the first quarter, which was an increase of 11% over the same period last year. This quarter marks the second full year following, our IDA label expansion in early 2018. And in that time, the team has consistently delivered strong results, more than doubling the Feraheme patient share in the hematology/oncology segment of our business 18.4% in Q1 of 2018, to nearly 40% in Q1 2020, in what has been a truly remarkable launch.

Turning to Makena; we finished the quarter with $21.8 million in revenue, which was [Technical Issues] below the same quarter last year and $3.8 million [Phonetic] below Q4 2019. As a reminder, this was our first full quarter following the FDA Advisory Committee meeting last October. While revenue was down quarter-over-quarter, that seems a nice job stabilizing monthly patient enrollments prior to the pandemic.

As Scott mentioned, declines in medical business where conditions and illnesses not related to COVID-19 have been widely reported, and our products, especially Feraheme, have not been immune to that impact. As you might be aware, Feraheme is administered with two infusions, typically in a critical care [Phonetic] hospital and the patient’s ability to access those treatment settings, has become challenged. We believe this dynamic will negatively impact Feraheme sales in the second quarter, as we’ve already observed volume declines in the month of April.

For Makena we’ve seen smaller impacts over the same time period, as our customers are finding alternative ways to get these high-risk patients their injections during the pandemic. More recently, we have begun seeing leading indicators of recovery, with consecutive weeks of increasing outflow for Feraheme and patient enrollments for Makena. But to be clear, we have not yet returned to pre-COVID levels. And while we believe the underlying patient need for both products remains high, the speed and extent of the recovery largely depends on the fee mix [Phonetic] and on patient visit normalization and healthcare providers ability to administer treatment for those in need. While we don’t yet know the full impact of COVID in our business, we do believe that as policymakers begin to to remove the stay-at-home orders and people begin to participate in their normal routines, patients will once again head back to doctor’s offices and infusion centers to receive the treatments they need. We believe the patients will be there on the pandemic has passed, and we will be there to ensure they have access to our medications.

I’ll now pass it over to Ted for the financial update.

Edward Myles — Executive Vice President, Chief Financial Officer and Chief Operating Officer

Thanks Tony. Since Tony just covered revenue for Feraheme, which were strong and Makena, which appears to have stabilized after the Q4 AdCom meeting, I’ll start with operating expenses here on slide 7. As you can see from the year-over-year trends, we have been managing expenses carefully as we’ve navigated our strategic evolution and the COVID-19 pandemic. We had a couple of one-time expenses in the first quarter of 2019 related to the acquisition of Perosphere Pharmaceuticals and a restructuring charge related to our Women’s Health and Maternal Health salesforce combination. Excluding those two items, operating expenses decreased by approximately 20% year-over-year.

SG&A expenses decreased by 29% year-over-year. A key driver in our Q1 2019 SG&A spend was the DTC campaign to support Intrarosa. We reduced our investment in that product during the second half of the year, driving the favorable trend you see in the comparison to the first quarter of 2020. Year-over-year R&D expenses decreased by approximately 38%, Vyleesi was approved in June of 2019, so the R&D spend on that product significantly decreased in the second half of last year. These decreases in operating expenses were partially offset by an increase in cost of product sales, due to an increase of approximately $6 million in non-cash amortization expense driven by the fourth quarter revision of the estimated useful life of the intangible assets related to Makena, Intrarosa and Vyleesi.

Our year-over-year operating loss decreased significantly to $19.6 million compared to $117 million in last year’s first quarter. As part of our stated strategy to return to profitability, our adjusted EBITDA loss decreased significantly to $5.5 million in the first quarter compared to a loss of over $26 million in the first quarter of last year.

Moving to slide 8; in January, we issued 2020 financial guidance, provided here on the left side of the slide. That took into account the divestiture of our Women’s Health assets and our goal of becoming adjusted EBITDA positive. While that guidance captured a wide range of potential outcomes for our business, as we navigated through a year of uncertainty, it did not account for a global pandemic and its impact on our business.

Because the severity and duration of the pandemic and the subsequent speed of any recovery is so uncertain, it is impossible to reasonably predict how this recovery will look and how long it will take for patient visits to return to some form of pre-pandemic status. We therefore made the decision to withdraw our 2020 financial guidance at this time. As Tony mentioned earlier, we have some leading indicators to suggest that the decline may have stabilized, we just don’t know if the indicators we saw in April are representative of the remainder of the quarter or the remainder of the year. It’s important to note that while there is new risk in our top line, we remain committed to the previously stated goal of reducing total operating expenses by more than $100 million in 2020, as compared to 2019, and returning the company to profitability. This workforce reduction that we announced this morning is an important step in achieving these objectives and rightsizing the organization for the future. We will continue to closely monitor the impact of COVID-19 in our business and financials and plan to reinstitute financial guidance as soon as we can provide a reasonable range.

Please turn to slide 9; at AMAG, we are very committed to the health and safety of our employees, patients, healthcare providers and business partners. We have taken numerous actions to-date to ensure business continuity. These steps have been working very well and we are continuing to call upon our customers, interact with government and private payers. We continue to focus on these important activities to make sure, healthcare providers can help their patients, regain or maintain access to our essential products.

After review with our manufacturing partners, at this time, we do not anticipate that COVID-19 will materially impact our ability to supply the market in the near term. We continue to work diligently with our suppliers to maintain continuous supply, as the COVID-19 situation evolves. On the clinical development front, we have experienced delays in our ongoing AMAG-423 Phase IIb-IIIa clinical trial and our planned ciraparantag Phase IIb trial due to COVID-19. Again while we cannot estimate the severity and duration of the pandemic and subsequent speed of recovery, we do expect these delays to continue to impact trial site initiations and patient enrollment for these trials. We are working with our CROs to reduce spend on these trials during this period. While we remain committed to developing products that could create the next leg of growth for the company, we cannot confirm timing of our development progress. We do look forward to updating you at the appropriate time.

I’ll now hand it back to Scott to remind you of our goals and wrap up today’s call. Scott?

Scott Myers — President and Chief Executive Officer

Thanks Ted. I’d ask everyone to turn to page 10 and review our goals and the status where we stand now. We continue to execute on our 2020 goals, which are outlined and we are now making great strides towards those. I am pleased to have joined AMAG as the new CEO and lead the company at this critical juncture in its evolution. As we previously mentioned, we are progressing the Intrarosa and Vyleesi divestitures and we will provide an update by the end of the second quarter. We remain steadfast about driving Feraheme growth and despite the challenges resulting from COVID-19, we are keeping our sales, sales support, medical affairs teams fully engaged. We are working to continue our dialog with the FDA to maintain access to Makena for eligible pregnant women. As we shared in the press release this morning, the FDA responded to our request to discuss the future of Makena and indicated it was premature to hold a meeting at this time. We continue to actively market and support Makena in the marketplace. We are committed to work collaboratively with the FDA to support continued availability to Makena and its patients. As expected, COVID-19 has resulted in delays to the AMAG-423 and ciraparantag development programs The AMAG-423 Phase IIb and IIIa clinical trials is a hospital-based trial and all sites have paused new patient enrollment and the company has had to pause initiation of new sites due to the pandemic, thus significantly impacting recruitment and enrollment. AMAG continues to work with the FDA to initiate the ciraparantag Phase IIb trial in healthy volunteers in the U.S., but the COVID-19 pandemic has also forced the clinical trial sites, where the company expected to conduct the trial to close during the pandemic.

We continue to explore ex-U.S. portfolio partnering opportunities for our established brands and our pipeline. Ws we look towards the future, we remain committed to managing our business to further our goal of achieving profitability in 2020. There is no doubt that we’ve had some unforeseen headwinds with COVID-19. However, we will do everything in our control to closely manage our expenses and maximize our portfolio.

Given the challenge that all of us are having in this remote situation, I will either answer the questions after the operator opens up the line or direct the questions to a member of my executive team. This concludes our formal remarks and I now ask the operator open the call for questions.

Questions and Answers:

Operator

[Operator Instructions]. The first question comes from Ami Fadia from Leerink. Your line is open.

Ami Fadia — Leerink — Analyst

Hi, good morning. Thanks for taking my question. And Scott, congratulations on the new role. I wanted your kind of view on the company and the trajectory its going at, and what might — in the couple of weeks that you’ve been at the company, how are you thinking about driving shareholder value in the company, in light of some of the stated sort of priorities for the company? And then specifically just with regards to ciraparantag, we recently saw the Portola acquisition and some of the features of ciraparantag are certainly competitive, relative to index. Can you kind of talk about when we might get visibility into the ciraparantag approvability and how do you plan to take that asset forward? Thank you.

Scott Myers — President and Chief Executive Officer

Yeah, Ami. Nice to meet you, albeit virtually, thanks for the question. So a couple of things; coming in, as I said, I’ve been welcome with open arms by the executive team, and we really did start off with some very simple focal points. First and foremost, stabilize and growing our base business with Feraheme and Makena, and obviously keeping access to Makena, which continues to this day. The second was to focus on expenses, that’s both opex and headcount, and we announced today, the reduction of 140 positions, to rightsize the company for growth in the future. The third area obviously is the pipeline, focused down on that to look at the highest value assets, which we believe ciraparantag to your question, is a very-very good. Want to do. And given the Portola acquisitio, I think that’s a really nice validation of this class of drug.

And then finally using business development, both on the, I’d say the sell side and the buy side, to free up some cash flow to improve our balance sheet and then also COVID-19 has impacted a lot of other people — excuse me, people and companies, and attracting with our great sales team, the sales — with fully integrated sales support, and then the medical affairs team that we have, versus some of these companies who also had to either reduce down or don’t even have those resources yet, we’re a very attractive partner for those people. And then finally, I think it’s a ways out, but doing anything we can to improve our balance sheet.

So my vision is to stabilize the company, I’ve shared that with the team, focus on our current products, make us much more efficient, cash efficient and watching expenses and then really turn towards the future and look for other assets to bring in and improve our balance sheet. So those are the few very-very clear focal points I’ve brought about. I don’t want to say right the ship, but it’s really just get the ship ready to move forward, and that’s why I came to the company, I really love the foundation that’s here, and we’re going to all work hard together to do that. So hopefully that answered your question.

Ami Fadia — Leerink — Analyst

Thank you.

Operator

Your next question comes from Douglas Tsao from HC Wainwright. Your line is open.

Douglas Tsao — HC Wainwright — Analyst

Hi, good morning. Thanks for taking the questions. Scott, maybe to start, when you think about business development opportunities, given your background, do you see sort of pivoting a little bit more of a focus on oncology? I mean certainly with Feraheme you have a strong anchor asset, obviously that’s not exclusive to oncology, or do you continue to see a lot of promise in the — sort of women’s health sector space of the business?

Scott Myers — President and Chief Executive Officer

Yeah Doug. Nice to meet you. Thanks for the question. Actually — I think you’re actually going in the right direction and — but we have a lot to do before we can completely make a pivot. But I think the discussions have been, obviously with the announced divestiture and the progress in negotiations we’re undertaking right now to move out of the heavy direct-to-consumer advertising businesses, Makena is a product that serves an unmet need. So we’re not giving up on that certainly. But looking more at Hem/Onc and Onc could be very attractive to us. And again as I mentioned, there’s companies out there that need help on the commercial side. And then yes. I’d like to go look for some of those assets that we can add in the bag, because Tony and and Craig Flanagan have built a great, great field force and our medical affairs teams that I’ve met so far. I think we can support our Hem/Onc and more of Onc type play, but that’s going to take some time, Doug, and we, and we have a lot of other things to do. Returning to EBITDA positive is certainly a strong goal for us and in cleaning up the balance sheet. But I feel like we have support from the board in that and hopefully shareholders. Yes and we’ve had some success recently in other companies with the Onc play. I think — I don’t want to say versus spec pharm, because there’s a lot of very, very successful spec pharm. But I think with the foundation I see here, we can make that pivot over time.

Douglas Tsao — HC Wainwright — Analyst

OK, great. Thank you. And then just quickly, in terms of Makena, obviously everybody is seeing pressure in 2Q, just curious in terms of Makena if — was it really based in geographies that have been most impacted by COVID or was a sort of broad-based and just trying to parse — the sort of folk — the reason I’m asking the question is, just trying to understand what we can figure out as COVID related versus might be just be some additional pressure on the franchise? Thank you.

Scott Myers — President and Chief Executive Officer

Yeah, I think actually Tony mentioned looking at some leading indicators of — that brand is actually proving to be rather sticky, as we would say in the jargon. But I’m going to turn it over to Tony. Tony, can you add any more color to Doug’s question?

Tony Casciano — Executive Vice President and Chief Commercial Officer

Yeah, sure. Good question, Doug. So just to be clear on what we saw in the first quarter, it was really a full quarter of the post AdCom impacts. All right. So if you look at what we were seeing in November and December and just kind of quarterize that, that’s essentially what we saw in the quarter. Due to some good work in stabilizing that business and stabilizing our lead indicators in terms of patient enrollments during the quarter. Not a COVID impact in the quarter, we saw it as we exited the quarter. And as Scott mentioned, which is interesting to see, it has been a bit more durable than I think one would have anticipated during the pandemic, and why we believe that, anecdotally is we hear from our physicians all the time, we view these patients as high-risk patients and I believe Makena is an important part of managing that risk. So we’ve seen things like alternate sites, so offices are changing the way they operate around the patients, to ensure they get their injections. We also have access and patients can access home nursing for injection, so they can work out through their insurance companies, and certainly what we’ve built, was a strong team at AllCare and Makena Care Connection can help navigate patients to that. And thirdly, we’ve really built kind of high-touch model around these moms in need over the years. So this model was essentially built for a bit of market kind of impact — interruptions in patient care. So for all those reasons, we’ve seen a — I wouldn’t call it marginal, because it definitely is an impact, but a much, much lighter impact than what we’re seeing, both with Feraheme and really across the industry, as you look at other other products and how they’ve been impacted during COVID.

Douglas Tsao — HC Wainwright — Analyst

And in terms of Makena, has there been a shift towards more commercial versus Medicaid during the last quarter, or — so far in 2Q?

Tony Casciano — Executive Vice President and Chief Commercial Officer

So hard to say in Q2 because we haven’t even closed April yet. I would remind you and remind everybody that Makena is close to 60% Medicaid, I mean that was consistent in the first quarter. And post AdCom, and this was part of I think the story in the process, and I think a slight shift in the COVID Medicaid, and I don’t believe there is [Technical Issues]. Otherwise around Makena, that seemed to be a bit stickier as well.

So no big shift so far in the quarter. But to be 100% transparent, we haven’t closed the quarter yet. So we wouldn’t see that.

Douglas Tsao — HC Wainwright — Analyst

Great, thank you.

Operator

And your next question will come to Jessica Fye from JP Morgan. Your line is open.

Jessica Fye — JP Morgan — Analyst

Hey guys, good morning. Thanks for taking my question. Scott, you talked about cleaning up the balance sheet, but also business development. If we look at a couple of years to 2022, how are you thinking about the capital structure, as it relates to the potential need to pay off or refinance the converts?

Scott Myers — President and Chief Executive Officer

Yeah I think, when we talk about business development, obviously it’s one of the — if we do deals, sell side deals or out-licensing and territories and things like that, it brings in a lot of non-dilutive capital. So that’s one way to look at it. And then I would ask Ted to pick the question up and say like how we plan to to move tactically through towards 2022?

Edward Myles — Executive Vice President, Chief Financial Officer and Chief Operating Officer

Yeah. Hi, Jess. So look, the convert is on our minds. It’s due in a little over two years, it has been part of our thinking for a long time, and the risk that we implemented this morning obviously has been many weeks and months in the planning and we’re executing on it now, is an important element of getting us back to profitability, which obviously profitability and internal cash flow generation is an important element of managing the convert. Suffice it to say, we don’t think we can generate enough cash to fully pay it off. So there is going to have to be some form of transaction occurring at some point, typically, in that 18 to 24-month to maturities range is when people typically think about managing a convert. So stay tuned. It could be some form of straight debt or equity linked debt or equity or some combination of all of the above, but we’re going to have to — we’re focused on it. We’re going to have to manage it. But first step is get profitable and then bring in some undilutive capital. We’re very focused on mitigating dilution and managing this convert.

Jessica Fye — JP Morgan — Analyst

OK, great. And maybe just another one on the P&L, can you say how much of the first quarter 2020 opex was associated with Vyleesi and Intrarosa, and kind of related to that, in just thinking about the restructuring, can you help us understand how much of the opex cuts are linked to the Feraheme and Makena business, versus how much are tied to Intrarosa and Vyleesi?

Scott Myers — President and Chief Executive Officer

Yes. So the trend from Q1 ’19 to Q1 ’20 is pretty straightforward. As you recall in Q1 ’19 we merged the sales forces. So we had about 110 employees out of the workforce by merging the sales forces. That was a little bit late in Q1. So most of Q1 2019 was a full two sales force effort and spend. And with all the big push there, Vyleesi wasn’t yet approved, the big push was on Intrarosa and our plans had been — as we step through 2019, shift our DTC investment from Intrarosa to Vyleesi to support that product’s launch. So in the first quarter, a big chunk of the spending in 2019 that went away, as you look at 2020 is the decrease in Intrarosa spend.

In terms of drawing a line between 140 positions that we eliminated this morning, how much of that was associated with the Women’s Health divestiture and how much was associated with softening topline; I can’t draw a line there. What I can tell you is, we had this RIF architected since Q4 of last year, but — and so part of that was non-hiring. We were very deliberate about not hiring a lot of positions, so that we would have to be able to mitigate the impact of a RIF. It’s certainly easier to eliminate an unfilled position than one that’s filled. So we’re trying to be mindful of that throughout the quarter. And look, the COVID risk certainly made us dig deeper in our plans, and we executed more heavily — more substantial reduction in opex and positions than we would have otherwise. But I think these are the types of decisions that make companies have to go through and they make management teams stronger, as you get through unforeseen crises, like this like this pandemic. So we’re comfortable with where we landed, just about 300 employees and we think that’s a good go-forward basis to hit all of our key objectives for the remainder of the year and beyond.

Jessica Fye — JP Morgan — Analyst

OK. So can I just follow-up on that, just to make sure I understand — when you talk about the $100 million year-over-year opex reduction. I think in the past you had kind of alluded to that being kind of the minimum. But I just want to make sure I understand, is that a reduction off of the Feraheme in Makena opex base, or just off of overall 2019 opex base?

Edward Myles — Executive Vice President, Chief Financial Officer and Chief Operating Officer

No. That headline, the greater than $100 million removed from the operating expense of the company, that was really associated with — that’s what we — kind of the banner we flew as we announced the strategic pivot and getting out of these women’s health products and these very-very heavy DTC spending. So I was comfortable saying, if you look at 2019 total opex versus 2020 total opex, there’ll be a more than $100 million drop. That was pre-COVID, that was just associated primarily with — we knew we were going to right size the company, we also knew we were going to decrease DTC spending substantially. So we stick by that. We can continue to do that. But of course with COVID evolving in Q1, we dug a little deeper to help mitigate whatever top line softness, we’re seeing.

Jessica Fye — JP Morgan — Analyst

Great, thank you.

Edward Myles — Executive Vice President, Chief Financial Officer and Chief Operating Officer

OK. And congratulations.

Scott Myers — President and Chief Executive Officer

Thanks Jess.

Operator

[Operator Instructions]. Your next question comes from Serge Belanger from Needham & Company. Your line is open.

Serge Belanger — Needham & Company — Analyst

Hi, good morning. Just a couple of questions for me. The first one, I guess for Scott, on Makena, from your interactions with the FDA, do you have any visibility on a timeline on when they can make a decision? And then secondly on Feraheme, you talked about expanding the market opportunity for that product, can that be done by just shifting or expanding the marketing focus, or is the way to do that really just by label expansion via additional clinical trials?

Scott Myers — President and Chief Executive Officer

Good question. Thanks. Nice to meet your first on Makena, our regulatory folks had been in touch with the agency and obviously given the world events and our interpretation from the follow-up to the AdCom is that they needed some more time to review the situation. We are dealing really with a safety signal here at all [Phonetic]. So they told us to wait and that we would hear from them, which obviously our label hasn’t changed. So we continue to actively promote that product. Our plan is to send in a briefing book at some point when it’s appropriate and then we will set up a meeting with them to hear back about what the plan is. We’re going to go in proactively with our own plans and suggestions about what to do post the AdCom.

So we’re feeling pretty good about that. I think silence is a good thing right now, because they’re very busy doing a lot of great things on COVID and we’re hearing that from other people and other categories of drugs, that if it’s not covered related, it will take some time. But we will be prepared for that meeting when they’re ready to have it. I have not personally spoken to the agency it, since I’ve only been here a couple of weeks. But our Head of Regulatory Affairs and the whole team are working very proactively on that.

With regard to Feraheme, I think there’s two angles with that. One is business development, so looking for outside the U.S. type out licensing opportunities to grow through territory expansion, and possibly some lifecycle management, ideas that have come up through the team or have come in from different investigators and so uses of Feraheme in different settings, and that’s about all I can say on that right now. But that’s — it’s a very trusted brand. It has done well in the past, and I think we’re going to look and see what we can do to just maximize it going forward.

Operator

OK. I have no further questions in queue. I turn the call back over to Scott Myers for closing remarks.

Scott Myers — President and Chief Executive Officer

Yes, well, we live in a very interesting and challenging time meeting each other virtually, continuing our relationships virtually for the time being. I look forward to meeting you in the near future in person hopefully, but I just want to thank you all for the support of AMAG and our team here, and really our patients, because we do really feel like our patients need us now and the providers that are treating them. We’re doing our best to help them in all the different ways that we can as an organization. But thank you for caring enough to call in today and supporting the company. I wish you all well and safety and good health for the future. But bye for now and hopefully see you soon.

Operator

[Operator Closing Remarks]