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 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

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!