What’s Next for Affymax, Inc. (AFFY)?

Affymax, Inc. (NASDAQ:AFFY) received its first Food and Drug Administration approval last spring with Omontys for anemia in dialysis patients. The drug enters a war against Amgen, Inc. (NASDAQ:AMGN)‘s Epogen, which has held a near monopoly for over 20 years.

As its lone product enters the market, what’s next for Affymax?

Let’s make a deal
Why would doctors prescribe Omontys over the better-known Epogen? Omontys’ once-monthly injection offers dosage advantage over the older drug, which has a regimen that can exceed a dozen doses per month. Epogen has also drawn safety concerns as of late. And Omontys offers a better price for treatment providers pressed by the new Medicare reimbursement rules.

Affymax, Inc. (NASDAQ:AFFY)

But victories in this market come from deals with dialysis centers. The companies have to slash prices to obtain the deals but in exchange have their drug easily distributed to the core patient group.

Fresenius Medical Care AG & Co. (NYSE:FMS) and DaVita HealthCare Partners Inc (NYSE:DVA) combined form about 60%  of the dialysis center market. Amgen has a “multi-year” deal in place with Fresenius and a seven-year deal with DaVita. Neither blocks Affymax getting its foot in those doors, but that’s less likely for the near future.

Affymax secured a short-term deal with Fresenius last year that expires in April. The company hopes to expand that contract for the longer term, but we’ll see if that happens and what percentage of customers would end up on Omontys rather than Epogen.

Amgen’s DaVita contract stipulates that the center will use Epogen for 90% of its patients. Affymax still plans to evaluate its chances. But Omontys does better with the mid-sized dialysis organizations, or MDOs. The company has deals in place with five of the six MDOs, including the newly struck agreement with DSI Renal.

The road ahead
Affymax will kick off a series of post-market studies this year with data reporting beginning in 2016. These will include a series of pediatric trials and an observational study tracking long-term efficacy and safety.

The European Medicines Agency accepted Omontys’ marketing authorization application last year, but Affymax and partner Takeda await a final decision. Takeda bears the responsibility of development abroad,  with Affymax in for half of the royalties.

On the financial front, Affymax will split U.S. profits with Takeda. Affymax will book commercialization expenses and a profit equalization payment from Takeda that come from Takeda booking the top-line sales. The third quarter report — the drug’s first full commercial quarter — showed $15 million in sales.

Foolish bottom line
Affymax’s up more than 200% in the past 12 months. That kind of growth can’t continue long-term, but there’s still potential with Omontys. Epogen falls off patent in 2013, and Roche already has a biosimilar in development. The big signs of confidence for Affymax will arrive via long-term contracts with Fresenius and/or DaVita. But those could be years down the line.

The article What’s Next for Affymax? originally appeared on Fool.com.

Fool contributor Brandy Betz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!