Affymax Inc. (AFFY) fell as much as 85 percent after the drugmaker and partner Takeda Pharmaceutical Co. (4502) voluntarily recalled an anemia treatment for kidney dialysis patients after reports of three fatal reactions.
Affymax declined to $2.62 at 9:34 a.m. New York time, after plunging to $2.49 in its biggest intraday drop since the stock began trading in December 2006. The shares of the Palo Alto, California-based company had gained 61 percent in the 12 months through Feb. 22.
All lots of Omontys, sold in 10 milligram and 20 milligram vials, have been recalled and health-care professionals have been told that patients shouldn’t receive the medicine, the companies said in a statement. Affymax hasn’t figured out why people taking the drug were having the reactions or what’s causing them, Chief Executive Officer John Orwin said.
“It’s premature to speculate on the timing or the next steps,” Orwin said on a conference call today. The adverse reactions happened to patients only on their first dose of the drug, and only in its intravenous form, Orwin said.
The company is analyzing data from patients with the reactions to try and find a cause, as well as looking at manufacturing, drug handling and drug administration as possible reasons.
Takeda and Affymax will split the costs of the recall in the U.S., Orwin said. Affymax also plans to look at its expenses and will closely manage its cash, said Chief Financial Officer Herbert Cross.
M. Ian Somaiya, an analyst with Piper Jaffray & Co. in New York, said he expected it to trade at little more than the value of the cash the company had on the books.
Investors will “take into account the lack of visibility on reintroduction of the drug and, more importantly, the difficult task of repairing a negative safety perception,” he said in a note to clients. He downgraded the shares to neutral.
The U.S. Food and Drug Administration, which approved Omontys in March, agreed to the recall, the companies said. Omontys generated $10.4 million, or 76 percent, of Affymax’s $13.6 million in revenue during the third quarter, the company said on Nov. 8.
Affymax’s drug is used to alleviate anemia in kidney dialysis patients, who can suffer from low red blood cell counts. There have been 19 reports of anaphylaxis from U.S. dialysis centers, three of which resulted in death, the FDA said. Some patients were able to be resuscitated by doctors.
The fatal reactions amount to 0.02 percent of some 25,000 patients who have received first-dose injections of Omontys, Takeda and Affymax said in the statement. About 0.2 percent of patients have had hypersensitivity reactions, a third of which needed medical intervention.
The FDA is alerting health-care providers and patients of the recall, which is due to reports of anaphylaxis, a “serious and life-threatening” allergic reaction, the agency said in a statement yesterday.
“Serious and fatal” hypersensitivity reactions have been reported in some patients within 30 minutes of receiving their first doses of the drug by intravenous injection, the FDA said in the statement. There have been no reports of reactions in subsequent doses or in patients that have finished their dialysis session, the agency said.