Affymax Lives to Fight Another Day, In Bid to Challenge Amgen’s Monopoly

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evidence. “We’re still trying to look at what happened in the pre-dialysis population,” Morris says.

Missing out on the pre-dialysis population means that Affymax could miss a significant part of the opportunity with its anemia drug. About three-fourths of the kidney disease market for anemia drugs comes from dialysis patients, while the remaining one-fourth comes from the pre-dialysis patient population, Morris says. Analyst Chris Raymond, in a note to clients on Aug. 5, said that Affymax’s dialysis-only strategy is “plausible.”

“Given our estimation that dialysis alone supports a valuation in the $20 range, we continue to recommend purchase,” Raymond wrote.

If Affymax files its application in the first half of 2011, it will almost surely have to pass the scrutiny of a public advisory panel that will want to look closely at the safety of its product. Since there’s already an effective drug on the market for these patients, it’s likely to get a standard 10-month review. It could be well into 2012 before the company could have this drug on the U.S. market, if it ever gets there. But key research leaders in the treatment of kidney disease and cardiology are “almost universally supportive” of Affymax’s plan to seek FDA approval for treating dialysis patients, Raymond wrote. And the safety questions that were raised by the other pre-dialysis trials may not actually derail the drug like investors thought when the data first appeared on June 21.

“While FDA certainly won’t ignore the pre-dialysis data, the agency has indicated they consider these patient populations to be completely separate,” Raymond wrote.

It will probably take a couple years to really know if this strategy pans out or not. But it’s at least a viable option—and a lot more viable than investors thought at first blush, Morris says.

“I’m happy with where we are,” she says.

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