UPDATE 2-AMAG safety update on anemia drug lifts shares

* AMAG says adverse event rate in line with drug label

* AMAG does not believe single death related to Feraheme

* Shares rise 4.5 pct (Adds company, analyst comment, background)

By Bill Berkrot and Ransdell Pierson

NEW YORK, Feb 5 (Reuters) - AMAG Pharmaceuticals Inc (AMAG.O), whose shares fell 16 percent on Thursday on concerns about the safety of its Feraheme anemia treatment, said the number of serious adverse events seen with the product was in line with what would be expected from the intravenous drug.

AMAG, whose shares rose 4.5 percent after the company issued its safety update late Friday, said 40 serious adverse events had been reported since the iron replacement drug was introduced in the United States in July 2009. That represents a rate of 0.1 percent of the 35,000 "patient exposures" to date, AMAG said.

"A single reported death occurred in a patient two days post-Feraheme treatment, which the company does not believe was the result of Feraheme," the company said in a statement.

"Since the infusion was well tolerated we don't think it (the death) was related to the drug," AMAG's Chief Medical Officer Lee Allen later said on a conference call.

Feraheme is approved for the treatment of iron deficiency anemia in adult patients with chronic kidney disease.

Analysts said they believe the AMAG share sell-off earlier in the week, which was triggered by a research note suggesting there had been a higher-than-expected rate of serious adverse events from the drug, was unfounded.

"Every drug has beneficial effects and unwanted side effects," Needham & Co analyst Mark Monane said, adding that he believes Feraheme has a desirable benefit/risk ratio that favors use of the drug.

Monane said he still expects Feraheme will eventually garner $500 million to $1 billion in annual sales once it gains broader approval for use in a wider variety of patients.

The company said the rate of serious side effects, such as a potentially dangerous drop in blood pressure or allergic reaction "was consistent with that contained in the U.S. package insert."

A drug's label, or package insert, typically includes results from clinical trials as well as adverse events seen with the medicine's use in studies.

Robert W Baird analyst Christopher Raymond said in a note that Friday's safety update "provides a big sigh of relief."

"With safety rumors completely dispelled, we continue to recommend purchase of AMAG shares into the low $50 range," Raymond said.

AMAG shares rose to $39.50 after hours from their Nasdaq close on Friday at $37.77.

Summer Street Research analyst Carol Werther also believes the recent sell-off was "overdone," but she was not quite ready to write off safety concerns as completely dispelled.

"The clinicians I spoke to are going to use the drug more cautiously until they have more information. Whether the information that came out today is enough, I have no idea," she said. (Reporting by Bill Berkrot and Ransdell Pierson; Editing by Bernard Orr)