Affymax Gears Up for its Make-or-Break Moment, As Anemia Drug Faces FDA Scrutiny

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at two of the four trials, in which patients were on kidney dialysis, there wasn’t any higher risk of serious cardiovascular adverse events. And when you look at the merged pool of data from all four trials, the studies reached their goals. The drug was able to effectively stimulate the production of oxygen-carrying red blood cells, which help patients fight off the weakness and fatigue of anemia. And when the safety data was pooled from all four studies, the Affymax drug didn’t appear to raise heart risks compared with a couple different Amgen drugs.

That further analysis prompted Affymax and Takeda to go ahead and seek FDA approval in the limited group of kidney dialysis patients—where the drug’s safety is established—while forgoing a more risky strategy of trying to seek approval for a broader group of patients that would include the pre-dialysis group. There are about 400,000 patients in the U.S. on dialysis treatment, and Amgen made $2.5 billion last selling its pioneering anemia drug, epoetin alfa (Epogen, a.k.a EPO), to those patients.

If Affymax can convince the FDA that its drug is safe and effective enough for kidney dialysis patients, then big questions will be about its business opportunity. One key differentiating factor for Affymax is that its injectable drug only needs to be taken once a month, unlike Amgen’s Epogen, which is injected one to three times a week. That’s not a huge convenience advantage for dialysis patients, who already have to come in to a clinic several times a week to get their blood filtered. But Orwin says that it reduces administrative hassles like nurse time, record-keeping, and product disposables.

More importantly, Affymax’s drug is a synthetic peptide, unlike Amgen’s larger protein molecule. That should mean that Affymax’s drug will be less expensive to manufacture, giving it flexibility to compete with Amgen by offering its product at a lower price. Affymax hasn’t set a price for its product, but Orwin said the company senses opportunity through a new set of Medicare rules which place a cap on the amount of reimbursement doctors can obtain for treating kidney dialysis patients. The reimbursement cap creates a new incentive for doctors to find lower-cost alternatives to Amgen’s drug.

“Just having a competitive alternative to EPO for the first time in 22 years will make peginesatide attractive,” Orwin says. If approved by the FDA, he says, “I think customers would be interested.”

Timing, like most things in business, will be hugely important to Affymax. If it can win FDA approval in the first quarter of 2012, it should have the second-mover position in the market to itself for at least a couple years. Switzerland-based Roche won FDA approval of an alternative epoetin (Mircera) but agreed not to sell it in the U.S. until July 2014 under an intellectual property dispute settlement with Amgen. And some of Amgen’s key intellectual property protection expires in 2015, opening the way for lower-cost “biosimilar” drugs that generic companies may seek to market.

All of those kind of business strategy considerations will be moot, though, if Affymax runs into a regulatory buzz saw of safety questions and never gets its drug on the market. The company itself is going into a self-imposed quiet period between now and the big FDA advisory committee meeting on Dec. 7, as it seeks to craft the most clear and compelling answers to the agency for why its drug deserves a shot.

Whether investors believe in his company or not, this is the moment Orwin has been waiting for since he took the CEO job back in January.

“We have a big step in front of us,” Orwin says.

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