Affymax Inc. (AFFY) won U.S. approval for Omontys, a competitor to Amgen Inc. (AMGN)’s anemia treatments that have been the only options for patients with loss of kidney function for more than 20 years.
The Food and Drug Administration cleared Omontys, known as peginesatide, for patients with chronic kidney disease on dialysis, the agency said today in a statement. The drug will be Palo Alto, California-based Affymax’s first marketed product.
“There has been and continues to be a lot of interest across the board from dialysis providers,” John Orwin, chief executive officer for Affymax, said in a telephone interview.
Approval of the drug -- intended to be used once a month instead of as often as three times a week for Amgen’s Epogen -- may save money for Medicare, the U.S. health program for the elderly and disabled. Peginesatide may generate as much as $700 million in peak sales by 2017, Ian Somaiya, an analyst at Piper Jaffray & Co. in New York, said in a telephone interview.
Affymax gained 4.2 percent to $14.31 at the close in New York. The company’s shares have gained 135 percent in the past 12 months.
“We’re dealing with a monopoly right now and that’s not ideal because it’s occurred for two decades,” Somaiya said of Epogen. “Small and medium dialysis centers are price sensitive. Peginesatide would be the choice for these dialysis providers.”
Dialysis removes toxins from the blood when kidneys can’t.
Orwin anticipates that large dialysis providers may try out Omontys in some centers before agreeing to use it in every facility. Fresenius Medical Care AG (FME), the largest dialysis provider by annual revenue, participated in final-phase clinical trials and is involved in continuing studies, making it easier to access the medicine’s performance, he said.
Amgen’s Epogen, approved in 1989, generated $2 billion in sales last year, a decrease of 19 percent from 2010, according to data compiled by Bloomberg. Peginesatide may compete to a lesser extent with Thousand Oaks, California-based Amgen’s Aranesp, which is primarily used on nondialysis kidney patients. Aranesp had $2.3 billion in sales last year.
Amgen, the world’s largest biotechnology company, has deals with DaVita Inc. (DVA) of Denver, the largest U.S. dialysis provider, and Fresenius, based in Bad Homburg, Germany. The deal with DaVita is exclusive and for seven years, while Fresenius’s agreement isn’t exclusive and is for an undisclosed amount of years.
JNJ’s Procrit Agreement
Johnson & Johnson’s Procrit, the same drug as Epogen, is used only in patients who aren’t undergoing dialysis under an agreement between the New Brunswick, New Jersey-based drugmaker and Amgen, Somaiya said.
Affymax has a profit-sharing agreement for peginesatide with Osaka, Japan-based Takeda Pharmaceutical Co. (4502)
Medicare spent $6.8 billion on dialysis and drugs for kidney failure patients in 2007, according to a March 2010 report from the U.S. Government Accountability Office, the investigative arm of Congress. Medicare, which covers almost everyone with kidney failure regardless of age, began reimbursing for such services in one bundled payment last year to save money.
The medicines are 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.
Omontys will be available within four weeks, Orwin said, and the company expects to have a sales force of as many as 80 people hired within 30 days to 60 days.
The company may support another product and may look again to kidney diseases, he said.
“There remains a significant unmet need in the renal space,” Orwin said. “At some point we could consider other specialty areas when we’ve exhausted that space.”
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