Amag Pharmaceuticals downgraded to Underweight from Neutral at Piper Jaffray

Piper Jaffray analyst Christoper Raymond downgraded Amag Pharmaceuticals (AMAG) to Underweight from Neutral with a price target of $6, down from $9.

The stock halted yesterday at $13.33.

An FDA panel yesterday issued a "surprisingly definitive" vote to withdraw Makena's approval, Raymond tells investors in a research note. The analyst, who has long argued the totality of the data casts doubt on the clinical utility of Makena as an effective treatment for the prevention of preterm birth, assumed the FDA "could exercise flexibility if the AdCom was supportive."

However, yesterday's vote provides the agency "all the cover it needs" to withdraw Makena approval. He says this, coupled with Amag's "non-trivial debt burden" and history of investing heavily in unsuccessful launches, makes it hard to justify "even a Neutral thesis."