Affymax, Takeda Win Approval of Anemia Drug to Challenge Amgen
[Updated: 3:20 pm ET/12:20 pm PT] Affymax completed its surprising comeback today, as it won FDA clearance for its first marketed drug, a product for anemia that will be the first to rival a 23-year-old monopoly held by Amgen.
Palo Alto, CA-based Affymax (NASDAQ: AFFY) and its partner Takeda Pharmaceuticals today won FDA approval of peginesatide (Omontys) as a new treatment for anemia in patients on kidney dialysis. The new drug is designed to stimulate production of oxygen-carrying red blood cells, but in a different way than Amgen’s epoetin alfa (Epogen), which was first approved in 1989. You can see the full FDA-approved prescribing information for the new Affymax drug, which includes standard warnings about cardiovascular risks of drugs in this class.
Now that Affymax has gotten the FDA green light, it will be allowed to sell its product to about 400,000 patients in the U.S. on dialysis treatment, and tap into a market that generated $2.5 billion in sales last year for Amgen. The Affymax drug is given just through one injection per month, instead of one to three times a week with the Amgen drug, but the real difference could be in terms of price. The Affymax drug is a peptide, instead of a larger protein, which means it should be cheaper to produce, giving Affymax flexibility to offer lower prices while still retaining significant profit margins. Orwin has noted that providers are under pressure from insurers to cut costs, and the new drug needs to fit into that landscape.
[Updated to include price] The new product’s wholesale price has been set at $108 per milligram. Although it is difficult to compare the Affymax drug price directly to Amgen’s because they are given on different dosing schedules, Affymax said the price is very close to Amgen’s on a per milligram basis, and its intent is to make sure its drug is the lower cost alternative in the final analysis. The actual price to providers will be subject to negotiations, Affymax said today on a conference call with analysts.
“It’s a very exciting moment for the company and very gratifying. We have tried always to work very hard to be completely transparent and work closely with the renal community, with the FDA and our partners,” Affymax CEO John Orwin said in a telephone interview this morning. “As a turnaround, it’s had its challenges, but we’ve focused on doing the right thing for our patients and it’s nice to see that work out in the end.”
Richard Pazdur, the head of the FDA’s hematology and cancer drug review office, added in a statement that, ”this new drug offers patients and health care providers the convenience of receiving ESA (erythropoiesis-stimulating agent) therapy just once per month instead of more frequent injections.”
I’ve written about Affymax’s travails in clinical trials, particularly the one from the summer of 2010 in which it appeared to show higher cardiovascular risk than the Amgen drug among patients with chronic kidney disease that hadn’t yet progressed to dialysis. Most Wall Street analysts wrote off Affymax’s chances then, but the company insisted its drug’s safety and effectiveness was comparable to Amgen’s in the kidney dialysis population, and the FDA ultimately agreed. Back in January, I spoke to CEO John Orwin about the preparations the company was making at that time to start selling the new product.
Affymax gets a 50/50 split of the Omontys business in the U.S. with Takeda Pharmaceuticals, while Takeda will get the lion’s share outside the U.S. If the drug is approved by regulators in other countries, Affymax will get a royalty that represents a “mid-to-high teens” percentage of sales, Orwin says.
The new drug won’t have completely unfettered access to this new market of 400,000 U.S. dialysis patients. Amgen struck a supply agreement recently with DaVita, a leading dialysis provider with about 30 to 32 percent of the market, in which DaVita agreed to use Amgen’s Epogen to meet 90 percent of its needs for anemia drugs, in a deal that reportedly will last seven years. Fresenius Medical, another leading dialysis provider with 35 percent of the market, also has a supply agreement with Amgen, although that’s not an exclusive deal, Orwin says. Taken together, Affymax believes it can immediately start offering its anemia drug as an option for about three-fourths of the 400,000 dialysis patients in the U.S., Orwin says.
The Affymax approval will also provide a lift to San Francisco-based Nektar Therapeutics (NASDAQ: NKTR), which provided a technology license that enabled Affymax’s drug to be given just in one injection a month. That royalty will represent a “low-to-mid-single digits” percentage of Omontys sales, Orwin says.
Shares of Affymax climbed 8 percent to $14.89 at 3:19 pm Eastern time, its highest value in the past year, after dipping as low as $3.93.