Palo Alto Investors, LLC (“Palo Alto Investors”), the owner, together with its affiliates, of 9.3% of the outstanding shares of common stock of AMAG Pharmaceuticals, Inc. (NASDAQ: AMAG)(“AMAG” or the “Company”) announced today that it had delivered a letter to AMAG’s board of directors expressing its concern with AMAG’s recent stock performance, and urging the Company to use its excess cash to repurchase stock and otherwise increase stockholder value.

The text of the letter from Palo Alto Investors to the board of directors of AMAG follows:

November 22, 2010

Board of Directors
AMAG Pharmaceuticals, Inc.
100 Hayden Avenue
Lexington, MA 02421

Members of the Board:

As you know, Palo Alto Investors, LLC (“Palo Alto Investors”), together with its affiliates, is one of the largest stockholders of AMAG Pharmaceuticals, Inc. ("AMAG" or the "Company"), holding an ownership stake of approximately 9.3% of the Company’s outstanding common stock.

We are writing to express our concern with the poor performance of Company’s stock, particularly in light of the recent FDA approval of its drug Feraheme® and the Company’s overall long-term prospects. Despite this promise, AMAG's stock price has fallen more than 60% year-to-date and presently trades near its cash value (including cash equivalents and short-term investments) of $273 million (as reported in the Company’s Form 10-Q for the quarterly period ended September 30, 2010).

Palo Alto Investors believes that the Company is extremely undervalued, that Feraheme® is the most effective way to administer IV iron, and that AMAG has the potential to grow revenues substantially from current levels. We further believe that AMAG will have abundant excess cash upon reaching profitability, and that it can maximize stockholder value by using this excess cash to repurchase its common stock at these severely depressed levels.

Palo Alto Investors endeavours to be a long-term partner, and we would like to work collaboratively with AMAG to maximize stockholder value. While increasing stockholder value and acting in the best interests of stockholders is always the principal duty of all members of the board of directors, it is particularly important in the current fiscal environment.

Palo Alto Investors is available to discuss these matters in greater detail with the management and board of directors of AMAG. We await your response.

Sincerely,

Palo Alto Investors, LLC

By: /s/ Will Edwards
Name: Will Edwards, Chairman and Chief Investment Officer

About Palo Alto Investors

Since its inception in 1989, Palo Alto Investors, LLC (“Palo Alto”) has focused exclusively on overlooked, misunderstood and undervalued segments of the equity markets. Palo Alto is committed to providing world class money management services to high net worth and institutional investors. Located in Palo Alto, Calif., Palo Alto employs 16 professionals and manages approximately $1 billion in assets. The firm is independently owned with significant Partner ownership interest.