Affymax Inc. (AFFY) surged the most in 16 months after U.S. regulators said the company’s experimental anemia medicine works as well as drugs sold by Amgen Inc. (AMGN) and Johnson & Johnson (JNJ) for patients with chronic kidney disease.
Affymax climbed 19 percent to $6.26 at 4 p.m. New York time in the biggest gain since August 2010. The drug, peginesatide, is “non-inferior” to Amgen’s Epogen and Aranesp and J&J’s Procrit, Food and Drug Administration staff evaluating whether the product should be approved for sale said in a report today.
Peginesatide would be the first marketed therapy for Palo Alto, California-based Affymax, competing with drugs such as Epogen, which generated 2010 sales of $2.5 billion. FDA reviewers also said the medicine is as safe as Epogen and Procrit for people on dialysis, the patient group for whom Affymax seeks approval. An advisory panel will meet Dec. 7 to evaluate the drug.
“We believe the probability of approval for the dialysis indication is high and that the FDA may have left the door open to approval” for chronic kidney disease patients who aren’t on dialysis, William Tanner, an analyst with Lazard Capital Markets in New York, said today in a note to clients after reviewing the FDA staff report.
The effects of peginesatide last longer, making it more convenient and less expensive, according to Affymax’s September quarterly report. The drug can be injected once a month, compared with an initial dose of three times weekly for Epogen.
The treatment had “similar safety results” for patients on dialysis to Epogen and Procrit, according to the FDA staff report. While clinical trials showed peginesatide may pose a greater risk than approved treatments for patients who aren’t on dialysis, agency reviewers said they weren’t able to determine whether “baseline demographic imbalances” skewed those results.
Affymax is seeking approval only for adult patients on dialysis, according to a company briefing document posted today on the agency’s website. The FDA aims to rule on the application by March 27. Affymax had formerly referred to peginesatide as Hematide.
Amgen, based in Thousand Oaks, California, signed a seven- year agreement with dialysis provider DaVita Inc., (DVA) based in Denver, Colorado, to replace a deal expiring Dec. 31 that will meet at least 90 percent of DaVita’s requirements to treat anemia, Tanner said in a client note, Nov. 18.
Amgen also signed a non-exclusive agreement with Fresenius Medical Care AG for an undisclosed amount of years, Tanner said. Fresenius and DaVita are the largest dialysis providers respectively by annual revenue.
Medicare, the U.S. health program for the elderly and disabled, began this year reimbursing for all services associated with end-stage kidney disease in one bundled payment to attempt to save money.
“In a bundled reimbursement environment, peginesatide could provide an attractive alternative to dialysis providers seeking to maximize profits,” Tanner said.
The FDA recommended in June that doctors use the lowest possible doses of erythropoiesis-stimulating agents like Epogen because of potential heart risks. The agency in 2006 first warned that high doses of the anemia drugs may cause heart attacks and strokes.
The FDA advisory panel will vote Dec. 7 on whether the benefits of peginesatide outweigh its risks, “considering the safety issues associated with other agents used to treat the anemia” that results from chronic kidney disease, according to draft questions posted today on the agency’s website.
While the agency “seems possibly open” to approving peginesatide, the drug still faces a “difficult road,” Michael Yee, an analyst at RBC Capital Markets in San Francisco, said today in a note to clients.
“Although a net positive panel vote could occur in theory given the panel is only considering the data at hand and not external factors, we think the hurdle is higher for FDA to actually go ahead and approve it because of broader issues” such as “continued regulatory scrutiny” of the drug class and a “lack of unmet need for a new agent,” Yee said.
Peginesatide is an erythropoiesis-stimulating agent Affymax said proved non-inferior in late-stage clinical trials to epoetin and darbepoetin, which include drugs such as Amgen’s Epogen and Aranesp. The safety of the drugs in regard to death, stroke and heart attacks was also similar for dialysis patients.
The trials consisted of 2,609 patients.
Affymax and Osaka, Japan-based Takeda Pharmaceutical Co. (4502) are co-commercializing peginesatide in the U.S.
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