UPDATE 2-AMAG Pharma gets FDA response letter for anemia drug

(Adds analysts' comments, updates share movement)

By Jennifer Robin Raj

BANGALORE, Oct 20 (Reuters) - AMAG Pharmaceuticals Inc (AMAG.O) said it received a complete response letter from U.S. health regulators regarding its marketing application for its anemia drug but believes it can address the issues raised without additional clinical trials.

"We are not giving the details of the letter, but expect to reply expeditiously to them," company spokeswoman Kristen Galfetti told Reuters.

Investors' reactions have been mixed and the stock's movement has been very volatile. Shares were trading down over 13 percent before the bell, recovered to trade up as much as 15 percent after market opened and then fell again about 13 percent in late-morning trade.

"A lack of detail and a challenging regulatory environment are likely to create significant controversy and volatility for the stock over the near term," Morgan Stanley analyst Marshall Urist said in a note to clients.

Since August, the U.S. Food and Drug Administration has started issuing complete response letter for drugs not ready for approval, instead of the approvable and non-approvable letters.

In the past, an approvable letter was seen as a sign that the drug could be approved if certain conditions were met. A not-approvable letter was seen as indication of more serious problems.

Analysts were more positive on the announcement and remained upbeat on the approval for the company's anemia drug, ferumoxytol.

"The news today takes the worst case scenarios -- non-approval and need for additional trials -- off the table," Needham & Co analyst Mark Monane told Reuters.

AMAG said it continues preparations for the intended launch of ferumoxytol to treat iron deficiency anemia in chronic kidney disease patients during the first quarter of 2009.

Based on the company's statement, analysts believe that a long delay for ferumoxytol seems unlikely.

"Any outstanding FDA issues are minor and will be rapidly resolved in the next few months," said Canaccord Adams analyst Adam Cutler, who expects the drug to be approved by about the end of the year and launched in the first quarter.

AMAG shares were trading down $4.69 at $32.06 in late Monday morning on Nasdaq. (Reporting in Bangalore; Editing by Himani Sarkar, Amitha Rajan)