Caligan Partners Initiates Consent Solicitation to Reshape AMAG Board, Citing Decade of Shareholder Losses

Investment firm cites directors’ stewardship tied to severe underperformance; proposes four new board members to drive strategic review

The Case for Change at AMAG Pharmaceuticals

Caligan Partners LP, holding 10.3% of AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG), has launched a consent solicitation seeking shareholder approval to replace four current directors. The initiative follows what Caligan characterizes as more than a decade of substantial value destruction under the current board’s watch.

The firm’s filing includes a roster of four replacement nominees with pharmaceutical industry expertise: Paul Fonteyne (former Boehringer Ingelheim USA CEO), Lisa Gersh (former CEO at Alexander Wang and Martha Stewart Living Omnimedia), David Johnson (Managing Partner at Caligan Partners LP), and Kenneth Shea (former Senior Managing Director at Guggenheim Securities).

Quantifying Board Performance: A Stark Picture

The numbers tell a compelling story. Director Davey Scoon, serving since December 2006, presided over an AMAG total shareholder return of negative 86%, compared to a positive 307.3% return from the Nasdaq Biotech Index during the same period. Director Gino Santini (on board since February 2012) witnessed a negative 51.1% shareholder return against the index’s positive 165.7%. James Sulat and Dr. John Fallon show similarly underwhelming results: negative 53.5% and negative 64.8% respectively, against broader market gains of 43.7% and 18.1%.

Since January 3, 2017, when AMAG initiated its “ambitious five-year strategic plan,” the company’s total shareholder return has declined 76%—a trajectory Caligan argues reflects fundamental strategic missteps rather than temporary market conditions.

The Strategic Plan Under Fire

The pharmaceutical investment community has expressed deep skepticism about AMAG’s product portfolio. Cowen analysts stated in August 2019 they “simply do not believe in the current new commercial portfolio (Intrarosa and Vyleesi),” while Piper Jaffray dismissed the Vyleesi launch as “throwing good money at bad.” Jefferies highlighted “continued challenges,” citing slow Vyleesi uptake and generic competition eroding Makena sales (representing roughly 40% of total revenue).

This market skepticism is reflected in AMAG’s short interest ratio—among the highest of U.S. pharmaceutical and biotech companies with over $300 million in consensus product revenue estimates for 2019.

The company’s financial deterioration reinforces these concerns. AMAG’s Non-GAAP Adjusted EBITDA swung from positive $223 million in 2016 to consensus estimates of negative $83 million in 2019—a reversal of $306 million in just three years.

Accountability Concerns: Compensation Despite Losses

Despite overseeing the company’s decline, AMAG’s senior management received average annual incentive compensation of 110% of target between 2012 and 2019. During the same period, board members approved a 70% increase in their own annual compensation, even as the stock price fell approximately 50%.

Caligan highlights what it views as a particularly egregious decision: the board approved the acquisition of CBR for $683 million in 2015 (financed partly by $500 million in high-yield debt issuance), only to authorize its divestiture less than three years later for $519 million in 2018. The transaction cost AMAG shareholders over $208 million in net losses when accounting for financing fees and debt extinguishment losses—equivalent to 50% of AMAG’s current market capitalization. The board subsequently cited the CBR divestiture as evidence of “responsible stewardship.”

A Challenge to Current Leadership

Caligan raises a pointed question: if AMAG’s board is genuinely confident in the company’s strategic positioning, why have only one of eight non-executive directors personally purchased company stock with their own funds?

Proposed Path Forward

Post-board refreshment, Caligan advocates for three immediate actions:

1. Conduct a comprehensive strategic review examining alternatives, including potential separation of AMAG’s women’s health assets (Intrarosa, Vyleesi) from Feraheme and Ciraparantag

2. Rationalize commercial spending levels to restore the company to profitability

3. Launch a robust process to secure international distribution partnerships for Feraheme

Caligan argues that meaningful shareholder change requires this consent solicitation process, given AMAG’s extended underperformance and valuation discount relative to industry peers. The firm maintains this represents a healthy corporate governance mechanism—not an attack on management, but a necessary reset following years of value erosion.

Shareholders interested in supporting the proposal can contact proxy solicitor D.F. King & Co., Inc. at (800) 252-8173 (toll-free) or (212) 269-5550 (collect) for voting information and assistance.