Amgen Rises on Recall of Affymax Anemia Drug
NEW YORK (AP) — Shares of Amgen Inc. rose Monday after a drug that competes with Amgen's anemia treatment Aranesp and Epogen was taken off the market because of severe allergic reactions and deaths in some patients.
THE SPARK: Affymax Inc. and Takeda Pharmaceutical Co. issued a recall of their anemia drug Omontys on Saturday, saying dialysis centers should stop using it. The companies said that around 50 patients have reported severe allergic reactions to Omontys and about five have died after their first dose of the drug.
Omontys is used to treat anemia in patients who have chronic kidney disease and are undergoing dialysis. Affymax and Takeda said about 25,000 patients have been treated with the drug.
THE BIG PICTURE: The Food and Drug Administration approved Omontys in late March. It is a once-per-month injection while older drugs have to be used once a week or more. Omontys, Aranesp, Epogen, and Johnson & Johnson's drug Procrit are all used to boost the formation of hemoglobin, a protein in red blood cells that delivers oxygen throughout the body. The drugs are used to reduce the need for blood transfusions.
Sales of the older anemia drugs have fallen sharply since 2007 because of a series of safety problems and restrictions on their use. Amgen said Aranesp sales fell 11 percent to $2.04 billion in 2012, and Epogen sales fell 5 percent to $1.94 billion.
THE ANALYSIS: UBS analyst Matthew Roden said it's not clear when Omontys will be back on the market or if sales will resume. Roden said sales of Epogen will improve while Omontys is off the market, and added that the recall might be good news for Amgen because the FDA might become more cautious about the safety of newer anemia drugs and generic versions of biotech drugs.
Roden kept a "Buy" rating on Amgen stock, with a price target of $98 per share.
SHARE ACTION: Amgen shares rose $3.47, or 4 percent, to $90.29 in afternoon trading. Shares of Affymax dropped $14.05, or 85.1 percent, to $2.47.