What happened

Shares of AMAG Pharmaceuticals (NASDAQ:AMAG), a commercial-stage pharmaceutical company, fell as much as 30% in early-morning trading on Wednesday. Shares are down about 28% as of 11:00 a.m. EDT. The double-digit decline is traceable to an FDA committee vote that recommended that AMAG's best-selling drug, Makena, be removed from the market.

So what

The FDA's Bone, Reproductive and Urologic Drugs Advisory Committee met yesterday to take another look at AMAG's PROLONG clinical trial. This study was used to gain FDA approval for Makena, a drug used to prevent preterm birth in pregnant women.

During the meeting, 9 of the 16 advisory committee members voted to recommend that the FDA pursue withdrawal of its approval of Makena.

Businessman with laptop giving the thumbs-down.

Image source: Getty Images.

If the FDA chooses to follow the committee's advice, it would be a huge blow to AMAG, since Makena accounts for more than half of total revenue.

Traders are dumping the stock in response to the news.

Now what

AMAG CEO Dr. Julie Krop stated:

We are disappointed with the nearly split vote on this key question and we are committed to working with the FDA to identify feasible ways to generate additional efficacy data on Makena while retaining current access to the therapy for at-risk pregnant women. Preterm birth is an urgent public health crisis and the implications of leaving pregnant women and providers without access to therapy that is manufactured in a safe and regulated way is profoundly troubling. For more than a decade, healthcare providers have relied on hydroxyprogesterone caproate to reduce preterm delivery in high-risk patients, which aligns with recently updated treatment recommendations of the American College of Obstetricians and Gynecologists, as well as the Society for Maternal-Fetal Medicine.

AMAG plans on providing investors with more information during its third-quarter earnings call on Nov. 1. Bulls and bears alike will want to tune in to get more details on the development.