Affymax Inc. (AFFY) surged the most in 16 months after winning a U.S. advisory panel’s backing for an experimental anemia medicine that would compete with treatments marketed by Amgen Inc. (AMGN) and Johnson & Johnson. (JNJ)
Affymax gained 26 percent to $7.41 at 9:40 a.m. New York time, after earlier reaching $7.47 for the biggest intraday increase since August 2010. The shares had fallen 12 percent this year before today. The medicine would be Palo Alto, California-based Affymax’s first product if it gains regulatory approval for patients with chronic kidney disease.
The benefits of the drug, known as peginesatide, outweigh potential heart risks, outside advisers to the Food and Drug Administration said yesterday in a 15-1 vote in Silver Spring, Maryland. The FDA isn’t required to follow the advisory panels’ recommendations.
“Christmas came a little early this year,” Chris Raymond, an analyst with Robert W. Baird & Co., wrote in a research note today. “We view approval as significantly de-risked,” and “remain buyers.”
If approved, the therapy would compete with Amgen’s Epogen, which generated $2.5 billion in revenue last year, and J&J’s Procrit, with 2010 sales of $1.9 billion. Affymax’s medicine works as well as those treatments and had “similar safety results” for people on dialysis, the patient group for whom Affymax seeks approval, FDA staff said Dec. 5 in a report.
“We don’t have a reason to say no to this drug in the dialysis setting,” Wyndham Wilson, the panel chairman, said after the vote. Wilson is chief of lymphoma therapeutics at the National Cancer Institute’s Center for Cancer Research, in Rockville, Maryland.
Peginesatide, like Epogen, Procrit and Amgen’s Aranesp, is part of a class of drugs known as erythropoiesis-stimulating agents that boost production of red blood cells.
The FDA recommended in June that doctors use the lowest possible doses of the agents because of potential heart risks. The agency in 2006 first warned that high doses of the anemia drugs may cause heart attacks and strokes.
Peginesatide proved noninferior to Epogen, Procrit and Aranesp in late-stage clinical trials and had similar risks of death, stroke and heart attacks in dialysis patients, Affymax said yesterday in presentations to the panel. The trials consisted of 2,609 patients.
Peginesatide’s effects last longer than approved treatments, making it more convenient and less expensive to administer, according to Affymax’s September quarterly report. The drug can used once a month, compared with an initial dose of three times weekly for Epogen.
Affymax is co-commercializing peginesatide in the U.S. with Osaka, Japan-based Takeda Pharmaceutical Co. (4502)
Amgen, of Thousand Oaks, California, signed a seven-year agreement with dialysis provider DaVita Inc. (DVA) of Denver to replace a deal expiring Dec. 31 that will meet at least 90 percent of DaVita’s requirements to treat anemia, William Tanner, an analyst with Lazard Capital Markets in New York, said Nov. 18 in a note to clients.
Amgen also signed a nonexclusive agreement with Fresenius Medical Care (FME) AG for an undisclosed number of years, Tanner said. Fresenius, based in Bad Homburg, Germany, and DaVita are the largest dialysis providers respectively by annual revenue.
“With Amgen’s recent exclusive DaVita contract and partnership with Fresenius, about 70 percent of the market appears locked up,” Raymond wrote today. “We would point out 30 percent isn’t, and we’d be very surprised if various out- clauses did not exist, which may be increasingly relevant if Affymax prices this drug at a discount.”
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.
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