Affymax Death May Be Near

Affymax Death May Be Near

March 19th, 2013 // 3:24 pm @

After recalling its only marketed drug after 19 cases of anaphylaxis, a serious and life-threatening allergic reaction that led to three patient deaths, Affymax is considering a sale, unwinding operations or bankruptcy. For now, 230 employees – or 75 percent of its workforce, including many commercial and medical affairs field personnel – are being laid off, according to a statement issued last night.

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The move is hardly surprising. After Affymax and its marketing partner, Takeda Pharmaceuticals, recalled Omontys, which is used to treat anemia in adult dialysis patients, the drugmaker quickly suffered a huge loss of confidence. Its stock was hammered and Wall Street analysts questioned whether Affymax could remain a going concern, especially since the reasons for anaphylaxis remained unclear (back story). And last night, Affymax shares dropped another 55 percent last night in after-hours trading.

And now, as cash grows tight, Affymax (AFFY) only compounded the mystery. In a filing with the US Securities and Exchange Commission, the drugmaker acknowledged that “with limited funds and resources, the company may not be able to complete the investigation or ever identify the causes of the safety concerns” (see here). Its looming demise is good news, though, for Amgen (AMGN) and Johnson & Johnson (JNJ), which sell widely used anemia treatments.

Is there any hope? The chances the drugmaker may survive is now “much more in question,” writes RW Baird analyst Christopher Raymond in a research note this morning. “Takeda could walk away. Much of Affymax’s plan is contingent upon Takeda assuming greater responsibilities under the venture. However, according to company filings, Takeda has the ability to terminate the collaboration with six months’ notice – a real possibility in our view given recent events.” Indeed.

Beyond the confusion over anaphylaxis and the collapsed stock price, the episode was noteworthy because it raised questions about the extent to which the FDA may become more cautious about approving biosimilars. As we noted last month, Omontys is not considered a biosimilar. The drug is a different molecule from Amgen’s Epogen or Aranesp, but Omontys is still similar to these other biologics, suggesting the FDA may want to pause before approving biosimilars. The agency, you may recall, has yet to issue a so-called pathway for approvals.

H/T: Pharmalot

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