Affymax shares jump after many investors had left the company for dead Print E-mail
By Staff and Wire Reports   
Thursday, 08 December 2011 08:43
Shares of biotech drugmaker Affymax Inc. (NASDAQ:AFFY) climbed early on Thursday, a day after a Food and Drug Administration panel voted in favor of its experimental treatment for patients with anemia caused by chronic kidney disease.

The decision will "pave the road" to FDA approval, with the agency scheduled to make its decision by March 27, according to a note from Citi analyst Dr. Yaron Werber.

Affymax shares jumped $1.25, or 21.4 percent, to $7.11 in premarket trading after the Affymax price target raised to $17 from $10 at Piper Jaffray. Meanwhile, Analysts at Cowen said the firm was fairly valued.

Affymax, based in Palo Alto, Calif., is seeking approval to market the drug, peginesatide, to adult patients on kidney dialysis, who typically suffer from anemia, a blood disorder that causes dizziness and weakness.

Peginesatide is part of a class of drugs known as erythropoiesis stimulating agents, which boost the oxygen-carrying component of the blood. The three blockbuster anemia drugs currently sold in the U.S. are made by Thousand Oaks, Calif.-based Amgen Inc. The drugs' recommended starting regiment is three weekly injections.

Affymax said its drug would be the first once-monthly injection for anemia associated with chronic kidney disease.

Late-stage trials of the Affymax drug, released in June, met their main goal but showed a higher rate of cardiovascular events, including death and stroke, in patients who were suffering from chronic renal failure but were not on dialysis.

Although Affymax is not seeking approval for use in non-dialysis patients, the discrepancy in results had raised red flags, especially given that people on dialysis are generally sicker.

Many investors had left Affymax "for dead," and little chance of a dialysis approval was priced into the company's stock, Baird analyst Christopher J. Raymond said in another note. He said survey data shows a receptive market for the drug's once-monthly dosing.

But Werber also said the drug will face some challenges gaining market traction, due in part to Amgen, which recently announced an agreement to supply its anemia drug Epogen to dialysis center operator DaVita Inc. for the next seven years.

"While the panel discussion was a positive for Affymax, we believe the safety of the drug will continue to be followed closely, and it remains to be seen how fast clinics will adopt the drug," Werber said.

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