AFFY 16.00$
Affymax Wins Approval of Drug for Anemic Kidney Patients
By Anna Edney on March 27, 2012
Affymax Inc. (AFFY) won U.S. approval for Omontys, an anemia-treatment competitor to Amgen Inc. (AMGN)medicines that have been the only option for patients with loss of kidney function for more than 20 years.
The Food and Drug Administration cleared Omontys, also known as peginesatide, for patients with chronic kidney disease on dialysis, according to a statement from the agency today. The treatment will be Palo Alto, California-based Affymax’s first marketed product.
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 potentially save money for Medicare, the federal 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.
“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.
Amgen’s Epogen, approved in 1989, generated $2 billion in sales last year, down 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 non-dialysis kidney patients. Aranesp had $2.3 billion in sales last year.
JNJ’s Procrit Agreement
Johnson & Johnson’s Procrit is the same drug as Epogen though is used only in patients who aren’t undergoing dialysis under an agreement the New Brunswick, New Jersey-based drugmaker has with 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.
DaVita Deal
Like peginesatide, Epogen is for anemia in chronic kidney disease patients on dialysis while Aranesp can also treat patients not on dialysis. 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.
Amgen, the world’s largest biotechnology company, has deals with the two largest dialysis providers DaVita Inc. (DVA) of Denver and Fresenius Medical Care AG (FME) 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.
To contact the reporter on this story: Anna Edney in Washington at aedney@bloomberg.net
To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net
