Investors didn’t like the news from drug maker Affymax
(NASDAQ:AFFY) Thursday morning. The company’s pilot program for the injected treatment Omontys in kidney failure patients won’t be expanded at one of the largest chains of dialysis centers in the US, according to a securities filing
The company’s shares plunged more than 30%.
But the news from Affymax wasn’t that bad. A pilot program involving patients of Fresenius Medical Care
(NYSE:FMS) is indeed being paused, but a letter from the big dialysis company doesn’t indicate a negative reason for the action. In July, Fresenius agreed
to use Omontys to treat anemia in kidney failure patients at 100 of its clinics. The pilot is a test of the new drug (approved
in the US last March) as Fresenius decides whether to use Omontys more broadly throughout its more than 2,000 North America dialysis centers.
“We are now working to analyze the full set of efficacy and safety profile information and feel that the current scale of our experience with use of the drug is adequate to complete this analysis,” Franklin W. Maddux, a Fresenius executive, says in a letter included in Affymax’s securities filing. “For patients on Omontys, we recommend continued use of the agent as it has been providing effective anemia management. We plan to pause the rollout to additional facilities and patients at this time until the analyses are complete and reported to our medical staff.”
More than 18,000 patients were given the drug at Fresenius clinics, he adds. See the Fresenius letter here
The pilot is important for Affymax, which touts its once-a-month treatment as an alternative to Amgen’s
(NASDAQ:AMGN) top-seller drug Epogen, which is dosed three times a week. Anemia is common in kidney disease patients.
The Fresenius letter did mention a known side effect of allergic reactions in some patients using Affymax’s drug, but Stifel Nicolaus analyst Joel Sendek says the number of incidents appears to be low.
“There is no worst-case scenario of a major safety signal,” Sendek says in a note. He recommends buying the stock and has a lofty $37 price target.
By midday, Affymax’s shares were down 6% to $15.96. The stock is still down 30% for the past three months. Amgen shares rose less than 1% to $85.08.
An Affymax spokeswoman didn’t return a call seeking comment.
No positions in stocks mentioned.
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